3Ps Uruguay Pilot Project: Mainstreaming Natural Capital Assessment for Wetland Conservation in Uruguay

Project summary

This project will conduct a natural capital assessment and valuation of Uruguay’s wetlands to support their zoning and prioritization. It will also build in-country capacity to apply natural capital approaches, and promote cross-ministerial collaboration and innovation. Key collaborators: Inter-American Development Bank, Uruguay’s Ministry of Environment and Ministry of Economy and Finance. It is funded by the Global Environment Facility. This is a pilot within the People, Planet, Prosperity (3Ps) project.

The Challenge

Uruguay is located in the temperate grasslands of the southern cone of South America, part of the Pampas ecoregion. It plays a significant role in global food systems, exporting enough to feed ten times its population. This production relies heavily on rural landscapes shaped by cattle ranching, dairy farming, rainfed agriculture, and forestry. However, this development model has come with environmental trade-offs, particularly for wetlands. These ecosystems have historically been undervalued and often drained to make way for agriculture and urban expansion worldwide. Significant threats to wetland conversion and transformation include agricultural and urban expansion, peat extraction, and the accumulation of solid waste.

In 2018, the Uruguay legislators amended its water code (Law No. 14.859) to protect wetlands at the national level, declaring it to be of public interest. However, the regulatory decree required to define which wetlands fall under this protection has not yet been enacted.

Uruguay has taken a number of innovative steps to protect its natural assets and respond to the climate and nature crises (such as its Sustainability-Linked Bond, and its Action Plan for the Santa Lucía River Basin, which includes concrete measures to protect the natural capital associated with this critical watershed for the country’s drinking water supply). Yet a key challenge lies in strengthening the link between natural capital and tangible planning instruments—particularly in ecologically sensitive areas such as wetlands—where data, governance, and implementation gaps persist. 

The Solution

This pilot project will support the implementation of the revised water code by contributing to the zoning and prioritization of wetlands for protection, using an ecosystem services (or “natural capital”) approach. This involves identifying wetlands of environmental importance based on the benefits they provide to people, such as regulating water for human consumption, controlling floods, retaining nutrients, providing coastal protection, and other essential ecosystem services.

In addition to a national-level natural capital assessment of Uruguay’s wetlands and a valuation of their economic benefits focused on the southern region of the country, the project will also involve an extensive training program, and engagement across ministries through an advisory council set up for this purpose.

Images courtesy of the Uruguay Ministry of the Environment.