FAO and ITTO highlight vast potential of payments for environmental services for conservation of tropical forests

Local communities can benefit from PES schemes provided their role is recognised in public policies

11 April 2014, San José/Rome - Payments for environmental services (PES), especially in tropical regions, should be recognised as an important tool for conservation and sustainable use of forests and other natural resources and better incorporated into national policies, the Food and Agriculture Organization of the United Nations (FAO) and the International Tropical Timber Organization (ITTO) said.

FAO and ITTO discussed the issue at the International Forum on Payments for Environmental Services of tropical forests, taking place 7-10 April in San José, Costa Rica.

Environmental services provided by forests include mitigation of greenhouse gas emissions, protection of watersheds, landscapes, and conservation of biodiversity. Payments for environmental services are an innovative financing mechanism, which provides economic incentives to farmers and forest landowners in return for conservation and sustainable management of natural resources.

Tropical forests in danger

With a majority of the tropical forests located in developing and low-income countries, these resources are particularly vulnerable to land use changes. Tropical forests are found in 65 tropical countries and cover about 1.66 billion ha. FAO, in its recent assessment of global forest resources, noted continued conversion of tropical forests to agricultural land and other land-uses, for example for mining, infrastructure expansion, and urban development.

PES schemes may help to reverse deforestation in tropical forests by creating appropriate economic incentives for forest landowners to protect forests, plant trees and apply sustainable forest management practices.

For example, in 1989, Costa Rica's forest cover was down to 29 percent of the country's territory. Eighteen years after the establishment of the PES system, forest cover has increased to 51 percent.

Secure land tenure

Clear and well defined property rights and tenure systems are essential when implementing PES schemes because very often the payments are based on the number of hectares of forest protected or the size of the areas on which the required land use practices are undertaken.

The insecure land and resource tenure of many poor, indigenous, and traditionally forest-dependent people remains a key obstacle which prevents them from receiving benefits from PES schemes. Other major obstacles to implementing PES schemes include a lack of recognition of the ecosystem service values on a political level and subsequently the lack of funding and the high costs of implementing new policies.

"The PES schemes cannot act to their full potential unless they are accompanied by clear land tenure, sustainable land management, updated forest information systems, efficient public infrastructure and consolidated funds to foster reforestation on a large scale", said Eduardo Rojas-Briales, Assistant Director-General for Forestry. "If these factors are in place, benefits such as sustainable forest development, multiple environmental services and improved livelihoods for forest communities will bring about a return on the investments made".

PES - an important tool to improve people's livelihoods

In countries where PES is an important policy tool for implementing sustainable forest management, such as in Brazil and Costa Rica, significant ecological and socio-economic outcomes are noted. In addition to the direct financial benefits, PES schemes were also reported to have widened livelihood opportunities for participating communities, including the diversification of their activities and sources of income.

For example, as a result of environmental benefits generated by PES, such as protected watersheds, water purification, and buffering against natural hazards, farmers could produce two crops instead of one crop per year. Instead of growing dry maize, they could also grow commercial crops such as banana, generating additional employment and income.

Costa Rica continues to be a pioneer in PES

Costa Rica's PES programme, which was started in 1996, recognises four environmental services provided by forests: carbon storage, watershed function, biodiversity and scenic beauty. The programme enables farmers who own forests to receive payments for the ecosystem services their forests produce.

Forest landowners may participate in several different activities which include: reforestation through plantations, forest protection, natural forest regeneration, agroforestry systems and forest management. The main funding has been via a fuel tax and fees included on each user's water bill.  

During the Forum, FAO, and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)  honoured René Castro Salazar, Minister of Environment and Energy of Costa Rica, for having pioneered the PES system in Costa Rica, the first in a tropical country,  almost two decades ago.

"The PES efforts enabled the government of Costa Rica to reach 81 percent of the goal of going entirely climate neutral by 2021", said Minister Castro Salazar. "It is possible to develop a similar strategy in other tropical countries of the world such as Congo, Tanzania, Kenya, Indonesia, Vietnam, Brazil and Colombia, whose forests contribute to climate change mitigation, and this is one of the proposals that will be presented at COP 21 in Paris in 2015. "

The Forum is jointly organized by FAO, ITTO, and the National Forestry Financing Fund (FONAFIFO) of Costa Rica.  

Photo: ©FAO/Riccardo Venturi
In 1996, Costa Rica pioneered the first in a tropical country PES approach which resulted in an increase in the overall forest cover. A wildlife natural park, Cartago, Costa Rica.