Incentives for Ecosystem Services

Building an IES package

Step 1: Map and assess current ecosystem services and socioeconomic context

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For this, the area of intervention needs to be defined, including:

  1. Defining ecosystem type and scale of focus
  2. Mapping the current use and users of ecosystem services to identify economic, ecological and social values associated with ecosystem services
  3. Identify and map threats to ecosystem services
  4. Map existing national regulations in place to address these threats

Key questions to ask

Key questions to ask

  1. What is the current state of the ecosystem?
  2. Who are the ecosystem users? How do they use the ecosystem?
  3. What are the perceived threats?
  4. What are the regulations in place to prevent these threats? (How) Are they enforced?
  5. What other national regulations currently exist to govern ecosystem services and agricultural practices? (How) Are they enforced?

Expertise needed

Expertise needed
  • Ecosystem services and agriculture expert to define the threats and possible mitigation methods through agriculture and conservation activities
  • Facilitator to lead stakeholder discussion to understand ecosystem services values and identify threats

Step 2: Identify best agricultural and conservation practices to address threats to ecosystem services

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Determine the practices required to mitigate the threats identified in Step 1 and to improve agricultural productivity

Key questions to ask

Key questions to ask

  1. Which farming practices could improve this problem, or protect this ecosystem services value:
    • For conservation?
    • For improved productivity?
    • For improved livelihoods?

Step 3: Identify barriers to adoption

  1. Identify the barriers for farmers to adopt best practices identified in Step 2

Key questions to ask

Key questions to ask

  1. What are the barriers for farmers to adopt these practices?
    • Technical
    • Financial
    • Cultural
    • Legal (enforcement of regulations, tenure issues)
    • Institutional (ownership, negotiation, trust)
    • Administrative 
    • Equity (access to resources, benefit sharing)
  2. What are the limiting factors to improving productivity?

Step 4: Identify incentives required to support farmers implement sustainable agricultural practices

Identify the short- and long-term incentives required to support farmers overcome adoption barriers identified in Step 3 for readiness, implementation and sustainability of best practices

Key questions to ask

Key questions to ask

  1. What are the incentives farmers require and/ or would require to overcome the adoption barriers identified in step 3 and/ or reward good environmental stewardship?
    • Type: Financial, in-kind, technical, etc.
    • For what activity?
  2. At what stage are these incentives required?
    • Readiness
    • Implementation
    • Sustainability

Step 5: Define monitoring needs

  1. Define and develop indicators and monitoring to track impact of incentives and activities for:
    • Socioeconomic outcomes (increased productivity, livelihood improvement, food security)
    • Environmental outcomes (conservation, restoration of landscapes, protection of sensitive habitats)

Key questions to ask

Key questions to ask

  1. What outcomes will be key to monitor to track impact of incentives and activities:
    • Social
    • Economic
    • Environmental
    • Food security (availability, access, utilisation and stability), nutrition
    • Gender
    • Equity of benefit distribution
    • Resilience (climate change, pests/ diseases, market changes)
  2. What indicators and methods are required to monitor these outcomes? i.e. No impact, Tier 1, Tier 2, Tier 3.
  3. Who will/ can feasibly collect, collate and analyse monitoring data? [N.B. this may influence which indicators and methods are used, whether training is needed, etc.]
  4. What existing monitoring is currently in place that could be used to in-build these indicators?

Step 6: Institutional mapping

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To identify:

  1. Short- and long-term incentives currently provided by existing public programmes and private sector investment
  2. Synergies and gaps for financing incentives
  3. Opportunities to engage with public programmes and private sector investments that have the potential to provide incentives

Key questions to ask

Key questions to ask

Institutional mapping:

  1. What existing incentives are currently provided from:
    • Public programmes?
    • Private sector investment?
  2. What type of incentives do they provide and what practices do they support?
  3. Who can access these incentives?
  4. What is the process for farmers to access the incentives offered?
  5. Are there perverse/ negative incentives that conflict with conservation and sustainable production objectives?
  6. What is the conditionality (if any?) for farmers to receive incentives? 
    • Mode: Input/ output based
    • Frequency of incentive/ reward: Upon compliance/ periodically/ once
    • Enforcement of conditionality (if any)
  7. How are incentives and their activities monitored?

Synergies and gaps:

  1. What additional incentives are needed:
    • At different stages (readiness, implementation, sustainability)?
    • To overcome/ compensate negative externalities of conservaiton (e.g. human-wildlife conflict), if any?
  2. Where can incentives be used together to support a wider sustainable landscape approach? For different stages:
    • Readiness: Restoration and conservation of degraded ecosystems, e.g. reforestation, terracing
    • Implementation: Sustainable agricultural practices, e.g. organic fertilizers, improved varieties
    • Sustainability: Access to higher-value markets/ value chain development, livelihood diversificationI
  3. How can a conditional link be built between conservation and improved productivity activities?

Engagement opportunities: 

  1. Where is the political entry point/ is there a trusted institution that could coordinate multiple incentives and enforce their conditionality?
  2. What opportunities are there for potential financing of incentives from additional public programmes and private sector engagement (throughout stages)?

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Step 7: Develop an enabling environment to implement a more coordinated approach

Support the improvement of policies to facilitate the development and support the implementation of IES packages, through:

  1. Review current policies and identify conflicts, bottlenecks and scope for improvement
  2. Raise awareness of policy- and decision-makers (through meetings, workshops, side events, etc.)
  3. Policy brief redaction

Key questions to ask

Key questions to ask

Improving coordination:

  1. What are the policies or institutions that can facilitate, or block, the coordination of agri-environmental institutions?
    • How can such blockages be overcome?
    • What institutions or initiatives could be used as an umbrella initiative to facilitate a more coordinated approach?
    • What policy or institutional changes are required to support greater integration of private sector investment?

Integrating public policies and private sector investment:

  1. How can private sector investment be integrated into the financing of an IES package?
    • What is needed to enable their engagement?
    • What policy blockages may prevent this?
    • What institutions/ regulations can facilitate or support this?
    • What are the financial mechanisms that IES can offer to facilitate the transfer of resources between different administrative areas, public sectors and private initiatives?
    • What policy or institutional changes are required to suport greater integration of private sector investment?
    • What coordination is required?

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