Food and Agriculture Organization of the United Nations- FAO
Payments for Environmental Services (PES) from Agricultural Landscapes
Pro-poor PES- equity and efficiency
Avoiding regressive schemes - when the beneficiaries can’t pay
In cases where some of the beneficiaries in a PES scheme are poor communities (for example in the case of watershed protection schemes, when the PES programme fee is added to already existing water use fees), and the community is not able to pay the extra cost of improved environmental service, there might be other ways in which they can contribute. For example, in Sukhomajri (India) some groups agreed to limit their use rights of grazing lands to sustainable levels as payment for investment in their water harvesting structures. In San Pedro del Norte, Nicaragua, some of the downstream beneficiaries participating in a scheme to protect water quality and increase downstream flows, who do not have the capacity to pay (fix water use fee of US$2 per month, a small share is earmarked for the scheme - US$ 0.30 per month) can instead contribute with labour helping to build soil and water conservation structures in the land of the participant providers upstream.
When the most efficient providers are the wealthier neighbours
Should the PES approach give up targeting and efficiency to be more egalitarian? Trade offs between efficiency and equity are in the end a political decision. However, sometimes it is possible to combine environmental priority areas with poverty alleviation goals. For example, if environmental priority land coincides with land poorly suited for agriculture, from where farmers draw only meagre benefits, a PES scheme can constitute an important additional source of income at relatively low opportunity costs for the provider- see maps 4.3 and 4.4 below.
Map 4.3: Degraded cropland with soil carbon sequestration potential and high poverty rates Click on the Map to enlarge(29)
Map 4.4 Biodiveristy hotspots in areas poorly suited to rainfed agriculture and with high poverty rates.Click on the Map to enlarge(30)
Location specific schemes focusing on specific areas of high hydrological importance (such as surrounding water springs) or high biodiversity value (remnant patches of native vegetation in a farm or riparian strips, constituting habitat for specific species of fauna and flora) will target these areas regardless of the income level of the land manager. In such cases, a trade-off can present itself between maximizing environmental results and social benefits (see box 4.2). If the social benefits are a specific requirement of the scheme, then the sources of funding should include those sectors of society interested in supporting these social objectives, like governments and international donors supporting poverty-reduction strategies. If the delivery of environmental services is overridden by social objectives, the beneficiaries supporting the scheme may lose confidence in it and stop supporting it.
Box 4.2: Trade offs in combining environmental and social goals(31)In the RUPES (i) action learning site in Sumber Jaya, results from hydrological assessment have shown that soil conservation efforts could be much more cost effective if efforts were channelled to privately owned lowland riparian areas instead of the upper slopes where the Social Forestry Programme (Hutan Kamasyarakatan-HKm) operates. “Applying this to Sumber jaya, it means targeting lowland riparian areas inhabited by relatively wealthy people will be 50% -100% more cost effective than targeting ridge line areas where Hkm operates and where poorer people live and use the land."
Focusing the scheme to the riparian providers would increase the environmental benefits delivered but undermine the opportunity for poorer groups upstream to improve their situation by being granted access to “protection forest” in return for environmental services provided by their soil conservation commitments. This is a common trade-off found in PES-type initiatives that must be made clear to all parties, particularly those contributing to the scheme and expecting the delivery of the service they are paying for.
(i) RUPES - an ICRAF program for developing mechanisms for rewarding the upland poor in Asia for the environmental services they provide - RUPES
(29) FAO.2007.The State of Food and Agriculture 2007(map 7)
(30)ibid (map 8)
(31)Kerr, J.2004.Trip Report: Property Rights, Environmental Services and Poverty in Indonesia. BASIS, University of Wisconsin-Madison
