1. What are the lessons learned from PES in developed and developing countries?
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).
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?
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.
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