Institutional Arrangements for Commodifying Non-Marketed Water Ecosystem Services: Insights from Tanzania

In Tanzania, ecosystem services such as water purification, flood regulation, fish habitats, and nutrient transport remain uncommodified, as they are viewed as public goods rather than tradable services, leading to overuse and water resource degradation. Consequently, the institutional arrangements for their commodification are poorly understood. This study investigates these aspects in the Lower Rufiji Sub-Basin, using data from 391 households selected through simple random sampling, along with insights from 22 key informants at the district and national levels. The findings indicate that the commodification of these services will require amendments to existing legislation, as current environmental legislations do not address their commodification. The study identified a range of organizations that could play key roles in the commodification process, with responsibilities spanning regulatory reforms, as well as in the design and implementation phases. Potential approaches for commodifying these services were identified, including the imposition of direct user charges or fees, tying of ecosystem service values into the market prices of goods such as water and fish, and the introduction of credit or quota systems. Based on these findings, the study recommends that the government (1) revise existing environmental legislations, (2) establish a robust institutional framework for commodifying these services that include actors at the community, district and national levels, and (3) adopt a mixed approach to commodification in order to accommodate households with diverse socioeconomic backgrounds. Moreover, as these services remain uncommodified even in regions beyond Tanzania, this study offers valuable insights for those seeking to develop similar frameworks.