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Kolkata’s Wetlands through the lens of incentive-based conservation policies

Updated: May 6

- Malisa Ghosh -


A well-known children’s fable talks about a goose that lays a golden egg every day, blessing its owner with the gift of wealth. But the owner, assuming that it has a cache of gold inside its body, kills the goose, thus losing his own source of wealth. This story is universally narrated to warn children about the pitfalls of greed, yet, our real-world institutions seemingly do not heed these lessons.

It is ordinarily believed that ownership of a resource leads to the owner naturally adopting responsibility for its well-being and long-term viability. However, in reality, this is only true when the benefits of the resource are enjoyed by those who own it. When the benefits of the resource primarily cater to others, public interests are unlikely to deter private owners from pursuing their own profits. This is particularly visible in the case of environmental resources, whose long-term benefits for the whole population are very often ignored in favour of gaining individual profits. This is the problem of “externalities”, which logically indicates that even the most abundant natural resources will eventually degrade and deplete.

The East Kolkata Wetlands

Kolkata is home to one such self-sustaining resource, spread out across the east side of the city. The East Kolkata Wetlands is a natural wetland, covering 12,500 ha., and is one of the largest wastewater-fed pisciculture systems, supporting approximately 1,18,000 livelihoods¹ To begin examining the EKW with a view of its externalities, it will be useful to understand the premise of the ecosystem and how it might, in fact, be Kolkata’s proverbial “golden goose”.

The East Kolkata Wetlands was declared a Ramsar site in 2002. This prestigious title of a “Wetland of International Importance'' is not without reason. Besides its multifaceted role in flood control, carbon sequestration² and biodiversity habitation, the EKW is also one of the only functioning natural organic wastewater treatment systems in the world. Dhrubajyoti Ghosh, the environmentalist who pioneered the study of the EKW, called Kolkata an “ecologically subsidized” city. The wetlands act as the kidneys for the city’s wastewater, organically turning sewage into fertilizer for fish cultivation, as well as water for rice cultivation, lowering the overall costs of production. This fish and rice then go back to the city markets to be consumed again, generating livelihood opportunities for the fishermen community, while saving the city over Rs. 4000 million a year in sewage treatment costs³.

However, though ostensibly an efficient system, these fisheries present some of the most common challenges of conserving natural resources, and have fallen prey to rapid and indiscriminate urbanization. After the Land Ceiling Act of 1956, which outlawed the possession of over 17 acres of land by a single owner, the landowners of old had to start leasing out their property. This was a step towards better distribution of the wetlands, but the leaseholders soon faced the crisis of raising capital, and the landowners were increasingly inclined towards selling out to real estate.

A 1992 judgment by the Calcutta High Court is often cited as an indisputable win for the fight to protect this ecological wonder. Following a public interest litigation filed by the NGO People United For Better Living In Calcutta (PUBLIC), the court ruled in favour of conserving the wetlands and prohibiting any activity that would lead to their degradation. Yet, three decades later, the illegal encroachment on wetland areas continues unmitigated, the city’s new metro line and the bustling Rajarhat-New Town stretch being prime examples of such unplanned urbanization.

Approaching the problem

The landowners of the EKW are not completely reliant on the wetland resource for existence. Rather, they value the resource solely as a piece of land, disregarding the ecological benefits and livelihoods it supports. A 2001 cost-benefit analysis of preserving the EKW found that middle-scale fisheries were becoming unprofitable in comparison to the opportunity cost of real estate use. Private owners were thus ready to convert the land into construction grounds for a greater profit. When the lakes are filled up to develop urban structures, the fishermen, who lack transferable skills or alternative means of income, are the only stakeholders left at a disadvantage.

The government regulations in place to protect these wetlands have not seemed to deter profit-seeking land sharks circling these lucrative waters, as illustrated by the realtors subtly redrawing the wetland borders and continuing to build urban structures in the area. This disinclination to respect rules might be rooted in the inadequacy of the rules themselves. Turning a blind eye to the cases of land acquisition, or imposing negligible fines on the perpetrators, cannot be expected to deter developers who make crores from their real estate projects.

Figure 1: Author’s analysis of data from Li, Xia,et al. "Spatial and Temporal Patterns of Wetland Cover Changes in East Kolkata Wetlands, India from 1972 to 2011”

Ecological benefits need urgent recognition and inclusion in calculating the true cost of the degradation of the wetlands. The economic value of ecosystem services can be determined by several methods, which are based on how much a community is willing to pay for a particular service. Studies on wetland valuation have considered the services like biodiversity, water quality, water supply, flood control and fishing activities in estimating the value of wetlands as a market good. Taking into account the variation in these estimations with geographical and socioeconomic factors, the EKW’s vast range of ecosystem services needs to be studied on a primary basis, in order to inform policy surrounding its conservation.

A Solution

With direct government regulation proving to be minimally effective in regulating urban development in the wetlands region, we can turn to an incentive-based policy approach - particularly, the emerging solution of Payment for Ecosystem Services (PES). It outlines a method of compensating individuals or communities for taking action towards providing or preserving ecosystem services, and simultaneously, payment for these services by the people who benefit from them. This is considered a sustainable model for solving the problem of externalities, as it depends on the mutual self-interest of service users and providers.

Kolkata’s wetlands offer a unique case of ecologically sustainable livelihoods which would benefit from conservation-focused management. As of now, 93% of the EKW fisheries are under private owners. A combination of economic valuation and PES mechanism would have the desirable effect of instituting a monetary incentive for the private owners to refrain from converting their land to real estate, as well as secure the ecosystem services at a lower cost than the long-term costs of the loss of these services.

The framework for this kind of policy solution requires us to proceed in steps: 1. Identifying the various services the wetlands provide to the larger population and quantifying their value 2. Determining the owners’ opportunity cost of converting their land 3. Conducting cost-benefit analysis to find the suitable payment level for the preservation of these services, ensuring the incentives are high enough to compensate the opportunity costs of the land-owners, as well as low enough for the beneficiaries to opt for this method of securing the service 4. Setting up a mechanism for the private actors to be paid in exchange for the ecosystem services they provide, either directly or indirectly

These payments can be implemented in a number of ways, most commonly through the government acting on behalf of the wider public who are benefiting from the service. PES inherently follows a voluntary path, and works only if all stakeholders recognize their benefits in participating in the program, i.e. establishing a clear demand and supply is essential.

Conclusion & Discussion

In the current majorly privatized setting of the East Kolkata Wetlands, the threat of urbanization looms large, not only on the fishermen’s livelihoods but also on the specialized expertise of sewage-fed aquaculture that is quickly becoming obsolete. Making conservation economically attractive to profit-seeking private owners has to be the first step for a conservation-focused policy approach.

Payment for Ecosystem Services is a solution which is being explored by environmental economists all over the world and has shown consistently positive environmental results. If implemented rigorously it would be a fair system that would work to the benefit of both the wetland resource and the self-interested owners. However, the method requires meticulous study and design, as well as regular assessment to ensure its long-term efficacy.

The simple incentive-based setup of PES hinges on establishing a marketplace for wetland services, which requires consideration on:

1. The methodology of valuation (whether people are ready to pay for the wetland services).

2. The mechanism of payment (from existing government funds or by imposing fresh taxes for the wetland services).

3. The constraints in terms of finances, public willingness and estimated extent of environmental benefits.


Bengal Policy Hackathon: Round II Problem Statements

Participating team can attempt any of the two problem statements

Conserving Kolkata's critical wetland resource is in line with some of the most crucial urban problems we are faced with today. Addressing the intersecting facets of this problem, we call for research articles on any of the following topics:

Topic I - Argue for implementing and operationalising the Payments for Ecosystem Services model for EKW

Support the argument for implementing the Payment for Ecosystem Services model for the EKW, and suggest ways to operationalize it.

Topic II - Argue against the Payments for Ecosystem Services model for EKW and suggest alternatives

Argue against the rationale for the Payment for Ecosystem Services model, and suggest an alternative method to tackle the problem of conservation of the EKW.

Top Submissions (from Bengal Policy Hackathon):

Themis-Riddlers - Whitepaper
Download • 9.70MB

Illuminati - Whitepaper
Download • 1.96MB

Ostrom Counsel - Whitepaper
Download • 865KB



  1. Chakraborty, Gorky and Gupta, Dhruba Das (2019). From Conflict to Coproduction: A Multi-stakeholder Analysis in Preserving the East Kolkata Wetlands. Forum for Policy Dialogue on Water Conflicts in India, Pune

  2. Pal, Sudin & Chakraborty, Sanjoy & Datta, Siddhartha & Mukhopadhyay, Subhra. (2018). Spatio-temporal variations in total carbon content in contaminated surface waters at East Kolkata Wetland Ecosystem, a Ramsar Site. Ecological Engineering

  3. Dey D., Banerjee S. (2018) How Expensive is the Decay of East Kolkata Wetlands? An Estimation of Opportunity Cost for Kolkata. In: Mukherjee J. (eds) Sustainable Urbanization in India. Exploring Urban Change in South Asia

  4. Kolkata's grossly undervalued natural sewage management system (India Water Portal, 2014)

  5. Chattopadhyay, Kunal (2000), Environmental Conservation and Valuation of East Calcutta Wetlands, Final Report, Funded by Environmental Economics Research Committee, World Bank Aided India: Environmental Management Capacity Building Programme

  6. Chakraborty, Gorky and Gupta, Dhruba Das (2019). From Conflict to Coproduction: A Multi-stakeholder Analysis in Preserving the East Kolkata Wetlands. Forum for Policy Dialogue on Water Conflicts in India, Pune

  7. Dey, D., & Banerjee, S. (2013). Ecosystem and Livelihood Support: The Story of East Kolkata Wetlands. Environment and Urbanization ASIA

  8. Florax, Raymond & Brander, Luke & Vermaat, Jan. (2006). The Empirics of Wetland Valuation: A Comprehensive Summary and a Meta-Analysis of the Literature. Environmental & Resource Economics

  9. Mukherjee, J. (2020). Untamed Practices. In: Blue Infrastructures. Exploring Urban Change in South Asia. Springer, Singapore


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