1. What are the lessons learned from PES in developed and developing countries?
In Indonesia unclear tenure and harmonization of stakeholders interests (e.g. on various government levels and between agencies, same as citizens and farmer groups or communities). Hidden interests in case of resources and exploitation by private investors and supporting agencies can effect projects when under implementation. I guess situation is much similar in other developing countries.
Especially economic driven fast unsustainable development does not match with sustainable ideas promoted in PES subjects, conflicts might be evident.
Opportunities might be limited resources and stress on ecosystem services which might tend for a rethinking of strategies same as questions how to combine rural development with conservation constraints to create benefits for communities. This could maybe address local levels In case of REDD the complex methodologies and conceptual design might be an issue, even if the efforts could innovate forest management tor better support a set of base data and finally increase situation in governance of forest resources.
If so, what were the main factors that contributed to the success of the PES scheme?
In my personal opinion combined PES for watershed management and biodiversity approaches integrated with rural development approaches using Micro Hydropower, Forest conservation and Agroforestry would have best opportunities. It is good to provide visible activities with direct benefit as starting point for any activities, later on carbon sequestration could be included if it will work successful in future. In REDD context starting in a voluntary framework above mentioned combination could be a good entrance to support trust building with related stakeholders.
Unsecure tenure and lack of information management could bring PES projects in critical states. As many agencies are involved in spatial planning and concession issuance this could harm projects and make them fail finally, e.g. REDD projects where 50.000 ha are seen as minimum and it could happen that parts of REDD DA could get lost because others hidden plans might be existing in case of mining.
2. PES can be conceived as a diverse set of policies, institutions and processes that mobilize funding from direct beneficiaries, taxpayers, consumers and other interested parties to reward/remunerate/pay providers of environmental services. Which type of PES-related policy instruments would you recommend for your own particular country and why?
For sure they make sense especially in development countries, because they can introduce partly also the matter why conservation is necessary and enlightens benefits. Often no awareness is in place for subjects related to environmental impact assessment and even if regulations are in place missing knowledge or weak methodological approaches create an insufficient result and copy paste is used widely. Especially Management and Spatial Decision Support Tools can generate more efficient decision processes and secure tenure or increase management different levels of ownership.
At least government sector should provide clear tenure schemes. Capacity building could be also supported public sector if appropriate institutions are already in place.
I guess it is not useful to abandon the ‘polluter pays’ principle. This could indeed increase awareness about harmful activities. E.g. overuse of pesticides "because if you use more it is better" which seems to me common in many cases.
3. What should be the role of innovation and entrepreneurship in making PES work for sustainable development?
Agroforestry production schemes with ecologic/ organic focus combined with climate change adaption could promote drinking water protection and increase biodiversity in general (see also under 2 and 3)
I guess the simplest reward would be the easiest: by having impacts for agriculture and improving livelihood. Agroforestry for watershed protection and including also reforestation as climate change adaption. By supporting organic methods and improve ecosystem services better harvest and for certified products (cocoa, rubber e.g.) higher income could be a benefit.
Promote PES in Micro watersheds could be an opportunity also to enforce policies towards IWRM in general! It can be used for drinking water protection within small entities and combined with rural electrification (MHPP). In Kalimantan it can support forest protection and meet local customary law also, where customary lands inherit forests for livelihood support (water, hunting, fruits). Laws for HCV recognizing these are in place but not monitored and slightly practiced in case of Indonesia. Here it could promote law enforcement and combine it with livelihood subjects and climate change adaption.
With regard to the question of what innovations are needed to make PES suitable for developing countries (my interpretation of Q 2.1 and 3.2), one of the major issues to address is the challenge of making PES systems work for smallholders. The transactions costs of dealing with many smallholders are high, which is why large-scale plantations can engage more easily.
Moreover, many PES systems deal only with legally recognized "owners" of the land, which further excludes many small-scale producers who rely on customary land rights.
Collective action can provide a mechanism for farmers to coordinate actions over large areas to provide environmental services such as biodiversity and watershed protection. Collective action also offers the potential to reduce the costs of monitoring and certification usually required to obtain payments for the services. However, the nature of the environmental services will influence the scale and type of collective action needed, the bargaining power of smallholders, and the investment or reinvestment requirements.
Working with Brent Swallow and Meine van Noordwijk, we have developed a conceptual framework that clarifies the inter-linkages between property rights, collective action, payment for environmental services, and the welfare of smallholder land users. The framework is centered on concerns of function and welfare effects of PES. The functional perspective clarifies the effects of collective action and property rights institutions on the supply of environmental services. The welfare perspective considers smallholders as one of several potential sources of supply, sometimes directly competing against large landowners and public sector providers. Using this conceptual framework can help to identify conditions under which smallholders are likely to be able to participate in payment for environmental services schemes. Greater consideration of the linkages between PES and other rural institutions can lead to more equitable outcomes, particularly by 1) suggesting how collective action can be used to overcome transaction costs and barriers to participation by smallholders, and 2) identifying mechanisms through which managers of small private parcels or areas of common property can be rewarded for environmental stewardship through PES.
The paper is available at http://www.capri.cgiar.org/wp/capriwp42.asp
Last week we received many valuable comments on lessons learned from selected PES projects but also more general views about the challenges PES schemes currently face on the policy level as well as on the project level.
The share of contributions from developed countries increased compared to the previous week. Comments addressed the question whether the EU’s Common Agricultural Policy (CAP) contains the right schemes to remunerate farmers for the positive externalities they generate through the adoption of sustainable agricultural practices. In this context, the experiences of national implementation schemes in England and Italy received particular attention.
In the case of England, the stewardship scheme run by Natural England rewards farmers for following certain specified pro-biodiversity practices. They are linked to CAP but also complemented by more voluntary schemes such as large-scale farm carbon footprint measurement and management programmes - typically based around livestock. These voluntary schemes seem to deliver promising results and could eventually be linked to PES schemes that generate win-win situations through sustainable intensification in livestock management.
The case documented in the Region of Marche in Italy suggests that EU agricultural development programs with a PES component could be designed in a more targeted and effective way. It is suggested that this could be achieved by moving towards more site specificity, more accurate priorities and more sensitive area definition. This would have a strong additionality impact and generate a higher level of ESs provision. Such a change may however lead to an increase in transaction costs resulting from monitoring, reporting and verification (MRV) on the governmental level.
The government-sponsored PES schemes in Europe appear to meet only few criteria set by PES purists who look at a particular environmental service as a commodity that can be traded as long as a proper value has been assigned. Some contributors doubt that such narrowly defined PES schemes are effective when implemented on the farm level. The local context, challenges in the proper valuation of environmental services, high transaction costs (largely due to MRV) and social complexities must be taken into account.
Quite a few contributors have expressed very critical views about PES schemes in developing countries. A case where REDD projects apparently have not delivered well is documented in the case of Nepal. The contributor also points out that PES does not just reflect a theoretical approach that could be implemented in various contexts. Instead it must be understood in the context of the history of subsidies in agricultural policies in developed countries and international environmental politics. He warns that PES approaches often neglect the cultural dimension and the complexity of local human-environment systems that are sustained through many informal institutions that PES schemes tend to ignore.
An approach to PES that seems to facilitate the empowerment of indigenous communities through grassroots innovation, local entrepreneurship and experimentation is however illustrated by another contributor from New Zealand. She reports on a Maori project that started as an effort to protect Maori-owned land from environmental degradation through an afforestation project. It eventually attracted foreign private sector investment but also benefited from an government incentive scheme (East Coast Forestry Project). Even though the focus was on erosion control, the project also increased the range of other environmental services and raises now new options such as the participation in markets for biodiversity offsets or carbon credits. The project also had a positive socioeconomic impact. It generated capital, income and employment for local Maoris, thanks to the establishment of a company called Porou Whanui Forests that is 100% owned by local Maoris. The success of this case is compared to another more top-down conservation-focused approach in the central part of the Northern Island of New Zealand where Maoris did have hardly any chance to set their own development agenda and the outcome in terms of livelihood improvements and environmental services was correspondingly low.
Finally, a contributor drew attention to the efforts of Bioversity International to connect PES also to sustainable management and preservation of agrobiodiversity, documenting cases in Bolivia and Peru. These Payments for Agro-Biodiversity Conservation Services (PACS) schemes also focus on the possibilities of local communities to generate value from the maintenance of threatened genetic resources through the development of market opportunities. The contributor sees a potential of such schemes to improve poor farmer livelihoods, once it is up-scaled. The success would however also depend on future research on the degree of potential complementarity between more conventional niche product/value chain development initiatives and PACS; and the potential to use market development approaches as a cornerstone of a PACS-related wide-ranging, cost-effective, diversity-maximizing national agrobiodiversity management strategy (as opposed to the many examples of individual threatened crop and livestock genetic resources market development applications).
In general, the contributors of last week seem to indicate that farmers are quite willing to take into account the provision of environmental services in their crop and livestock management practices if the incentive schemes are really able to either compensate them sufficiently for the additional work and the transaction costs or if they actually contribute to win-win situation that help them to generate more revenues through sustainable intensification, eco-label premium price schemes and agri-tourism.
In our final week of debate we would like to learn more about the effective use of new technologies (e.g. ICT, monitoring technologies) that help reduce transaction costs of PES projects and thus contribute to financial sustainability. Otherwise, we hope obtain many further contributions on the reasons for the successes and failures of policies and projects related to the remuneration of positive externalities in agriculture and payments for environmental services.
Many thanks to all of you for the lively discussion so far.
Lessons (read along with Sec. 1b for overlaps)
a. What are the main challenges and opportunities with regard to PES projects in your particular country?
b. Do you know of highly successful PES cases in your particular field of expertise (watershed management, biodiversity/wildlife conservation, carbon sequestration,…)? If so, what were the main factors that contributed to the success of the PES scheme?
To my view I find watershed management PES or PES like Naivasha-Kenya a successful project;
Success contributing factors (read section along with lessons):
c. Do you know of PES projects that have failed to deliver despite substantial donor support? If so, what were the reasons that caused the failure?
Generally failure could result from varied factors including failure for buyers/sellers to see business opportunity investing in conservation, design which fails to consider and focus on community livelihood needs… In Naivasha it took some time to mobilize and sensitize stakeholder on PES concept
However, Sasumua sub catchment in Upper Tana catchment area-Kenya is one of intended PES project which has taken long to take-off despite support from donors; Sasumua dam is a source of approximately 20% of water supplied to Nairobi city. Degradation in the catchment due to poor agricultural practices leads to massive siltation in the dam, making Nairobi Water Company to incur heavy water treatment costs especially during the rainy season. ICRAF verified the business case and suggested suitable intervention strategies, but the water company is not willing to invest in this probably due to lack of supporting policy framework and claim that they pay water use fees which should be used to support such initiative (not considering huge water treatment cost which could be reduced by investing in PES).
Policies (read with 1a: opportunities bullet two above). They all relevant to PES as they contain sections focusing on conservation of natural resources and socio-economic development. However, framing of policies should legislate PES in away to seal any chances of possible laissez-faire kind of community behaviour (free riders) in PES project
a. Are PES-related policy tools applied in affluent countries with lots of off-farm employment opportunities and low population growth rates also adequate for least developed countries where farm sizes often tend to get smaller due to lack of opportunities outside agriculture?
I view PES as a tool to address common socio-economic-conservation problem, specifically internalizing externalities. That is why flexibility when designing PES is imperative, (focus on what need to be internalized through PES and figure out how it can fit into “market-place” for acceptance by sellers and buyers). PES approach may not be the same and applicable everywhere due to Variations in socio-economic/cultural/geographic/ kind of problem to be solved etc. For instance how to design PES where environmental sellers (polluters)are rich land managers and buyers are poor
Least developed countries with decreasing land sizes; Innovativeness in PES implementation needed. Through PRA identify other income generating opportunities that can be integrated within PES. Small medium enterprises supplements PES incentives and ensure smooth household production and consumption over time
b. What should be the role of the public sector in creating a regulatory/enabling environment for PES to deliver? Where public sector assistance is most needed (knowledge transfer, communal/private land rights, infrastructure, measurement of environmental quality changes, etc.)?
Legalizing PES is important; the relevant policy in which PES can be instituted/integrated will recognise and foresee PES implementation as part of its mandate leading to promotion of PES in most hot-spot land/sea scapes. Policy change is the main role public sector can play along with other listed themes for public sector assistance. For instance infrastructure which most PES buyers may not address can be fixed through government direct involvement in PES as stakeholder. However, skills and knowledge transfer can be facilitated collectively through development/conservation organization taking lead as it is in Naivasha PES project
c. To what extent is it justified to abandon the ‘polluter pays’ principle of PES to increase agricultural productivity and reduce poverty in developing countries? Or should we use other tools to tackle these objectives separately?
Although Polluter Pays Principle is an environmental policy principle to internalize environmental externalities of socio-economic activities; to my view it may not work well for the PES aimed at increasing productivity/reducing poverty. Considering the subsistence nature of agricultural system in most developing countries, there are tendencies to allow positive externalities to enhance food security and reduce poverty while overlooking the negative externalities on same small farms. This makes agriculture at times exempted from environmental controls applicable to other industrial sectors. Therefore the small nature of agricultural production system in developing countries makes the principle difficult to apply thus not feasible. Equally, Market based tradable permit strategy may not work well.
However, in cases of large commercial farming, principle could be applied through command-and-control strategy ensuring zero tolerance to pollution of agro-ecosystems.
What should be the role of innovation and entrepreneurship in making PES work for sustainable development?
Integrating alternative nature based enterprises will add value to PES as conservation and additional alternative source of income contributing to green growth and development. Access to financial capital is a challenge to smallholder farmers and micro-financing PES related enterprises would be helpful to sustain development. In Kenya, most micro-finance institutions including mainstream banks have realized the need to finance small medium agro-based businesses
a. In some cases, PES has become a vehicle for a market for environmental goods (e.g. farmers respond to a growing regional demand for trees by setting up their own tree nurseries). Do you know of other business opportunities for farmers that could arise from the implementation of a PES scheme?
This could be area specific considering demand-supply forces, consumption of household requirements and relevance to PES design at hand; examples include but not limited to; fruit trees for conservation, income and nutrition; water harvesting (storm water) to check soil erosion, enhance infiltration/recharge and use harvested water for drip irrigation (i.e horticulture) during drought season; Aquacultures using harvested water; poultry to reduce dependency on land (cultivation), apiculture among others
One challenge that the poor farmers face is lack of stable markets for their produce as the markets and prices are mainly controlled by middlemen. Small holder farmers may not have the capacity to market their produce directly due to the low volumes they produce. Market linkages with the potential beneficiaries of environmental services would enhance the operationalization of PES schemes. This can be achieved through organizing farmers into marketing groups.
b. According to your practical experience with PES, where do we need innovation to make PES more effective and what type of reward system could create such innovation?
Conservation-livelihood related: Knowledge and skills, integrated small medium enterprises; Reward system should be arrived at through participatory discussion between buyers and sellers. The reward could be in cash, in kind or both. But should address the immediate needs of the beneficiaries. Generally, PES needs dynamism as one intervention may not be enough to propel PES to achieve expected outcomes
c. Innovative landscape approaches focus on the improvement of environmental services on the landscape-level while the PES approach is focused on the remuneration of individual farmers on the field-level. How can the two approaches be reconciled?
In PES, the critical focus is to restore the degraded areas/ farms that contribute greatly to sedimentation on the water bodies (for PES schemes that aims to deliver watershed services). In this regard, only those who adopt the desired land use changes are rewarded and it is expected once all the farms are protected, then the impact will be felt in the entire landscape, but incentives should be considered at the landscape level rather than individual level.
However, reconciling the two can also be done through Ecosystem-wide approach or Integrated Water Resource Management-IWRM principle as a coordinated development and management of water, land and related resources in order to maximize the resultant economic and social welfare in equitable manner without compromising the sustainability of vital ecosystems (approach which can be implemented through sub-basin water resource users association-WRUAs as in Naivasha basin
In Naivasha, Community Forest Associations formed for co-management of forest resources in the upper catchment could be integrated with PES for reconciling landscape/field level to enhance environmental services
 Wunder, S. 2005. PES: Some nuts and bolts. CIFOR Occasional paper 42. Centre for International Forestry Research, Bogor, Indonesia
 van Noordwijk, M and Leimona B. 2010. CES/COS/CIS paradigms for compensation and rewards to enhance environmental services. ICRAF Working Paper No. 100. World Agroforestry Centre. Bogor, Indonesia.
In New Zealand a developed country, the indigenous peoples, Maori, a tribally based community have low socio economic statistics, more similar to developing countries, than developed countries. This has meant that access to PES is still low and in New Zealand, PES is still evolving. For Iwi Maori (tribal Maori) PES are seen as an important contribution to their commitment and ethos as kaitiaki or stewards. Maori collectively own approximately 500,000 hectares of land that is mainly marginal and undeveloped. For a range of reasons including lack of capital, land management structures and government policy. For Maori having PES would recognize the role that Maori land often in native forests and reserved for cultural and environmental reasons have to the water quality, biodiversity and erosion control for the rest of the countries.
Many Maori would be more open to retaining lands in native forests if PES were readily available. One option raised at recent meetings amongst Maori in regards to climate change was the establishment of a biodiversity credit to support Maori who have a long term view of land ownership and allow them to trade these credits as a carbon market would work.
Porou Whanui Forests is a forestry company 100% owned by Maori and more specifically the tribal grouping of Ngati Porou. NPWFL was established in the late 1980’s for several reasons, the first was to ensure that land owned by Ngati Porou was retained in the traditional and collective ownership of the tribe. Inherent cultural connections to the land based on spiritual and intergenerational inheritance were being threatened through government policy and the best way for Ngati Porou to avoid the ramifications of these policies was to develop their lands. However the land is extremely erosion prone with massive sedimentation issues in the Waiapu river caused by wide scale land clearances on lands not best suited for farming. Ngati Porou decided that the only way to save their lands from slipping off quite steep lands into the rivers was to convert lands to forestry. There were significant cultural and environmental reasons for this.
However Ngati Porou is situated in one of the most depressed socio-economic areas of New Zealand, finding the capital to afforest was next to impossible until a joint venture option with Korean firm Hansol Forem and the New Zealand Government’s afforestation incentive programme called the East Coast Forestry Project were established. This provided effectively a subsidy to encourage east coast landowners to afforest. The key for the government was erosion control, however spin off effects have been improved water quality from previous land uses and bio diversity improvement reviving and supporting traditional food gathering and traditional knowledge. The combination of this partnership has allowed this successful afforestation of 10,000 hectares of land and a proposed further 10,000ha in the next 10 years. It is now one of the largest employers on the East Coast and is set to harvest its first rotation in the next 5 years. The company is run along cultural values and is intrinsically Ngati Porou, using traditional structures and lands to become one of the largest indigenously owned and operated companies in the country. NPWFL are now embarking on a major carbon scheme to add further value to their owners, as well as taking advantage of the Emissions Trading Scheme in New Zealand rewarding the natural affinity of Ngati Porou as environmental stewards through a user pay system for polluters.
In Taupo, the central part of the north island of New Zealand, government legislation dictated that lands should be reviewed for their landscape or natural value. During a desktop review of the lands in the region, it was identified that a huge majority of the lands that were considered to have landscape or natural, ecological value were Maori lands. These lands were then put under a protection policy to restrict development. For Maori this was hugely restrictive, as they did not have the opportunity to develop their lands previously due to lack of capital and land management structures, they were still in native forests and non-developed. However the lands around them were heavily developed and environmental issues, like erosion and lack of amenity areas were prevalent. Maori lands therefore were being disadvantaged as just because they could not develop their lands, and have retained the natural and landscape value, they could not develop in the future. Maori were calling for the local government to recognize and not restrict development. PES would have created capital to sustainably develop many of those lands for tourism options.
Tina Porou | Ohaaki Consenting Manager | Contact Energy
Taupo, New Zealand
From immemorial time, knowingly or unknowingly, man has been benefiting from the Ecosystem but paying little consideration with regards to PES. Priority ought to be giving to PES knowing well that there is no profession that can survive without forests and trees. Accelerated developments worldwide, increased food production, increased health, increased nutrition and income all lead to loss of biological potential of the land, biodiversity, climate change,desertification,erosion,floods,low soil fertility, low food production and famine to mentioned but a few. This is due to the negative attention paid to PES both past and present. The negative over dependance on inorganic fertilizers, chemicals, massive tree felling to mention but a few are some of the actions done to the Environment without adequate consideration of PES that man has to pay now as a way forward. This could be done through a wise use of the available resources without causing any damage to the environment, hence a friendly approach and utilization; through a sustainable agriculture development. For in comparison, the benefit derived from these negative activities highlighted above hardly match the cost of PES for such actions. For the way forward, both develomental agencies, government or non governmental, private organizations and individuals must respect the environment and adopt sustainable Agriculture Development approach and work Sustainably in all aspects of development that leads to increased food production without inflicting any damage to the environment.
ABUBAKAR SADIQ IBRAHIM BIRMA
Head Sustainable Agriculture Development. IFAD CBARDP PSO
Federal. MInistry of Agriculture and Rural Development! KATSINA.
I would like to follow up on Dr Shepherd’s comments on the current situation with PES in many countries and the need for a critical, analytical look at why they are failing to achieve the desired (intended) goals in the first place.
More importantly, the dominant belief that is currently driving the PES that a financial incentive mechanism can by itself address the resource degradation problem (ignoring the fundamental underlying social and ethical complexities or root causes).
Claudia Berretta PhD –University of Urbino (Italy)
The analysis of the application of the forestation interventions of the RDP (Rural Development Plan) at a very local level - within the Province of Pesaro Urbino in Italy, (from 1995 to 2011) gives us some good news. The first good news is that EU Member States can benefit of a stable financial support for the realization of new forests plantings and the consequent delivery of Ecosystem Services (ESs). The second one is that the RDP forestry programs have all the features of a PES mechanism, which is considered as an advanced tool for the enhancement of ESs delivery. We can surely affirm that these programs have all features of a PES mechanism, since the archetype PES definition is very adaptable to this case.
In relation to the concrete application of Reg. No 2080/92 (community aid scheme for forestry measures in agriculture) and Reg. No 1257/99 (support for rural development from the European Agricultural Guidance and Guarantee Fund), and to their features we believe that this funding mainly conceived as a mechanism for the attainment of socio-economic goals such as transferring income to farmers or to contrast the land abandonment and thus, it’s not really working as a supporting tool for the achievement of environmental targets. Although the general recognition of the ESs forest produce, the agreement is solely based in the commitment of planting trees supposing that forest produce public goods with a result of a weak environment targeting. In this case, the payment is received regardless of whether the ESs are effectively delivered. Moreover, the monitoring activities (the monitoring activities are included in the Annual Executing Relation yearly prepared by Regions on the basis of art. 48 paragraph 2 of Reg. (EC) No 1257/99, art. 53, paragraph 1 of Reg. (EC) No 445/02, modified by art. 1, paragraph 6 of Reg. (EC) No 963/2003, and art. 61 Reg. (EC) No 817/2004, and STAR D/761 Final) do not imply the analysis and the quantification of the expected environmental outputs with its explicit ranking. In other words, the EU programs do not have measurable environmental output in order to control if the program attains the declared aims. The difficulties in planning this policy tool at European level are also related to the effective local baseline. The weak targeting could be resolved by introducing a greater site specificity. Indeed, if we consider the case under investigation, we have seen that the financial support is open to all farmers/landowners/public bodies but the allocation is not based on the local baseline and thus additionality can’t be really ensured. Moreover, if priority areas would have been defined, the forestation interventions would have been done in particularly sensitive area with a better achievement of ESs delivery. For instance, with regard to the improvement of the rural landscape value of the Marche Region, some authors believe that afforestation interventions would have been done in plain areas where plantings could increase the vegetable structures mosaic and could create little local ecological network (Antonelli et. al., 2006), but, the plain areas have been marginally involved in the programs.
Although the European and regional plans define the environmental benefits of planting interventions, it has not been realized a differentiated payment system for permanent woods plantings actions. Maybe, if the costs supporting would have been stronger, farmers would have preferred this type of plantings. To direct funds where the Region will have the largest environmental impact, the regional programming would define:
A better definition of the local ESs to be delivered and the consequent definition of the priority area could be a new base for shifting the financial aid, intended as a socio-economic tool, towards a truly environment support to the local farmers that improve the natural resources conditions and produce positive externalities to local community (i.e. by mapping as priority zones the High Natural Value areas).
Another approach could be applied for the definition of the annual premium. Since the annual aid based on the average farm income of the different areas have not really influenced the choice of farmers to participate, the annual premium could be calculated on the basis of the effective ESs the forest planted deliver.
We can for example suggest the study of Colozzi et al. (“Delphi based change assessment in ecosystem services values to support strategic spatial planning in Italian planning”, 2012, Ecological Indicator n. 21) which gives the monetary values of the ESs for land-cover classes. Through this approach the final annual premium embodies the single value of the ESs delivered by forests: climate and atmospheric gas regulation (€ 124 - €/ha per year), disturbance prevention (€ 163), fresh water regulation and supply (€ 3988), waste assimilation (€ 76), nutrient regulation (€ 317), habitat refuge, and biodiversity (€ 629,33), recreation (€ 107,46) aesthetic and amenity (€1.51), soil retention and formation (€ 9.05) and pollination (€301.66). The final sum depends of course from local conditions and from the effective provision of the ESs listed above. These figures clearly show the high value of the services forests produce, nevertheless at present they have no value at all. With this complete new methodology, the purpose would also be to make more manifest the concept of the positive externalities produced by local agrarians.
The introduction of weighting in monetary terms the environmental services in a government tool could also introduce a little cultural revolution too: the citizens could effectively know the environmental benefits they have from the actions financed and could also define the environmental services the society receive per each Euro spent from the government (i.e. from the citizens them-selves).
Maybe it’s time to change the trade-offs between efficiency, effectiveness and equity. In other words the program could move from a PES mechanism with untargeted payment, horizontal participation, low ESs levels designation to a more site specificity programming, an accurate priority and sensitive area definition, in order to reach a strong additionality impact and an higher level of ESs provision although this change would mean for the governmental level higher transaction costs.
It could be also useful to reconsider the way of establishing the cost planting contribution and the financial aid, considering them as a real compensation for the environmental benefits produced instead of a subsidy to the farm revenues.
The innovating key is likely the application of a completely different way of thinking the territory: the plans, the priority area definition and the types of plantings could be defined on the basis of the values and the public goods the community want to protect and enjoy.
While the idea of PES is at first sight conceptually attractive, It may simply provide an easy way out – a way of avoiding the inconvenient truth that most consumers of food are failing to pay for its full cost (the exception being those who support fair trade systems). In so doing, they are passing on to their children the costs of destroyed and polluted natural resources Felled forests, eroded and nutrient-depleted soils, depleted aquifers, reduced biodiversity etc) and of coping with accelerated climate change processes which are, to a large extent, being driven by the greenhouse gases emitted by the current systems of intensive crop and livestock production. Low food prices that fail to internalise these costs are usually justified on the grounds that, if food prices rise, more people will be hungry – forgetting that, apart from causing environmental damage, low food prices encourage overconsumption and waste of food on a vast scale, and lead to appalling conditions of work for most people engaged in the food chain, especially small-scale farmers but also the people involved in harvesting, transport, processing and distribution. And so, when people call for more investment in food production they should probably spend less effort in inventing various PES programmes but simply lend their weight to the idea that a gradual rise in food prices from consumer back to farm gate is a rather good thing from a food management perspective. It should include taxing the system at various levels to create mechanisms through which middle and high income consumers can start to foot the bill for the social and environmental damage that they are now creating and fund the shift to more sustainable systems.
An essential corollary for such a fundamental policy shift is the putting in place of social protection programmes, with transfer amounts indexed to local food prices, that enable all low income families to meet their essential food needs. It is far cheaper to do this that effectively subsidise the costs of food for all consumers by turning a blind eye to the negative externalities induced by conventional policies.
To some extent the rise in international food prices that has happened in the last 3-4 years has begun to address the problems caused by long-term low prices, but its effect on investment in expanding production has been muted by the undermining of confidence caused by speculation-driven price volatility. But rising prices alone, unless accompanied by policies to protect food consumption by the poor and to support the shift to more socially and environmentally sustainable production and consumption systems, will do little to improve global food management systems – and could even exacerbate the fundamental problems that, if harnessed sensibly, they could resolve.
Links and resources:
RPE/PES in the Agricultural and Food Sectors
Payment for Ecosystem Services and Food Security
Paying farmers for environmental services
FAO website on PES
Payments for environmental services - What role in sustainable agricultural development?
Climate Change Mitigation Finance for Smallholder Agriculture
Payment Schemes for Environmental Services in Watersheds
The new generation of watershed management programmes and projects
FAO's activities on watershed management and mountains