In the first installment of this series, we explained the root cause of ecosystem degradation: their value is not reflected in any market price, and the services they generate function as public goods. To address this gap, the Ministry of the Environment (MINAM) has created one of the most advanced regulatory frameworks for environmental financing in the region: the Mechanisms of Retribution for Ecosystem Services (MERESE).
What are MERESE?
They are voluntary agreements designed to ensure the long-term continuity of ecosystem services. These agreements operate as schemes that enable the generation, channelling, transfer, and investment of resources—economic, financial, or non-financial—between two main actors:
Retributor: A person or entity (public or private) that receives a social, economic, or environmental benefit from a well-functioning ecosystem (e.g., access to clean water, enjoying a landscape, or benefiting from wildlife in a national park).
Contributor: A person or entity (public or private) that carries out technically viable actions (such as conservation or restoration) to maintain or improve the source of the ecosystem service.
In essence, a MERESE is the agreement through which the Retributor compensates the Contributor for maintaining the ecosystem from which they benefit. This mechanism introduces a direct incentive: conservation becomes a financed and sustainable activity, bridging the gap between those who benefit from nature and those who care for it.
Which ecosystem services can be included in a MERESE?
According to Article 6 of the MERESE Regulation, the eligible ecosystem services include:
- Water regulation
- Biodiversity maintenance
- Carbon sequestration and storage
- Landscape beauty
- Soil erosion control
- Provision of genetic resources
- Air quality regulation
- Climate regulation
- Pollination
- Natural risk regulation
- Recreation
- Nutrient cycling
- Soil formation
- Tourism
- Water yield
- Water quality regulation
- Others determined by MINAM
How does a MERESE work in practice?
A MERESE operates as a voluntary and conditional agreement between those who benefit from an ecosystem and those who conserve it. Its implementation follows three main stages:
1. Mechanism design
Before signing the agreement, four key elements are defined:
- The source of the ecosystem service: identifying the ecosystem, the service it provides, and its current condition.
- Involved actors: who will be the Contributors (those who care for the ecosystem) and the Retributors (those who benefit).
- Value and costs: estimating how much it costs to maintain or improve the service.
- Financing: deciding how resources will be obtained and managed (public, private, or mixed).
2. The retribution agreement
This is the core document of a MERESE, where:
- The Contributor commits to carrying out conservation or restoration actions.
- The Retributor recognizes these actions through an economic, financial, or non-financial retribution.
- The agreement specifies the actions, the retribution modality, and how resources will be executed.
For example, water utilities can collect funds through their tariffs to invest in the conservation of watersheds that regulate their water supply.
3. Monitoring and validation
To ensure proper functioning:
- The agreement is registered in MINAM’s Unified MERESE Registry.
- A monitoring system verifies compliance with conservation actions.
- MINAM oversees progress and can cancel the registration if commitments are not fulfilled.
Together, a MERESE aims to generate a virtuous cycle:
beneficiaries finance conservation → contributors implement actions → the State validates that the ecosystem service is maintained or improved.
The initial focus of MERESE: Water regulation and carbon
The original design of the MERESE system centered on two strategic ecosystem services: water regulation and carbon sequestration and storage. This prioritization was intentional, recognizing that these services:
- Have the greatest direct impact on the most populated coastal cities (drinking water, irrigation, energy).
- Offer the strongest public and private investment potential.
- Enable quantifiable and verifiable evidence.
This vision is reflected in Title IV of the Regulation, which dedicates Articles 26–31 to these mechanisms:
- Articles 26–28: Water regulation MERESE (involving water utilities, SUNASS, hydraulic operators, and users’ associations).
- Articles 29–31: Carbon MERESE (including forest-based modalities, links to REDD+, Clean Development Mechanism, and integration with national GHG reporting).
In other words, the MERESE system was originally built on these two pillars, from which MINAM has gradually expanded the regulatory framework to other ecosystem services.
10+ years of MERESE
Between 2014 and 2024, MINAM promoted 70 MERESE initiatives across the country:
- 49 with water utilities (EPS),
- 7 linked to tourism,
- 14 with irrigation users’ associations, municipalities, water funds, and private companies.
By 2024, 12 agreements registered in the Unified MERESE Registry mobilize nearly S/ 19 million, intervene in more than 8,900 hectares, and benefit 12 million people.
In addition, 49 EPS already have SUNASS resolutions authorizing tariff-based MERESE collection for watershed conservation.
Notable MERESE examples
1. SEDAPAL and its first ecosystem project in Milloc
SEDAPAL launched its first MERESE project to restore hydrological regulation in the Milloc micro-watershed (Carampoma), a major natural water source for Lima and Callao. Financed through the MERESE component included in water bills, the project invests over S/ 3 million in wetland restoration, native species revegetation, fencing, and monitoring systems. These actions enhance infiltration, regulate flows, and secure the water quality that supplies 53% of Lima’s population, while generating local employment and supporting communal economies. (Source: Forest Trends)
2. EPS Marañón and the MERESE for the Amojú watershed (Jaén)
With SUNASS technical support, EPS Marañón is implementing a MERESE to strengthen water security and sanitation services in the Amojú watershed. The mechanism engages local communities to conserve water sources through natural infrastructure and sustainable production practices. Actions include agroforestry systems, coffee parcel management, fire prevention, organic fertilizer production, and capacity building in natural resource conservation. This case shows how MERESE can enhance water quality, climate resilience, and service continuity. (Source: SUNASS)
3. MERESE for Sierra del Divisor National Park
In 2025, Peru reached a milestone by implementing the first MERESE in a national park: Sierra del Divisor, a territory of over 1.3 million hectares in Ucayali and Loreto. The agreement—led by MINAM, SERNANP, the French investment vehicle RESTORE – Biodiversity Together, and FRONTERRA—establishes long-term financing for conservation, surveillance, infrastructure improvement, and specialized monitoring. Selected by the European Commission as one of three pilots to test the new “Nature Credits” framework, the project positions Peru at the forefront of biodiversity finance. Its design included participatory processes with Indigenous federations such as FECONADIC and ORPIO, ensuring that conservation aligns with Indigenous rights, autonomy, and development. (Source: Inforegion.pe)
Conclusion
A decade of implementation shows that MERESE can become a decisive tool for financing conservation in Peru. With a strengthened regulatory framework, successful hydrological cases, and the recent inclusion of protected natural areas—such as Sierra del Divisor—the country is poised for a new wave of MERESE initiatives in high-value ecological areas. These mechanisms will increasingly address not only water and carbon, but also biodiversity, pollination, recreation, and other strategic ecosystem services. This shift opens the door to a more robust, sustainable, and collaborative model of conservation financing that unites communities, enterprises, and the State in protecting Peru’s natural heritage.
