Payments for ecosystem services in the tropics: a closer look at effectiveness and equity

We undertake a review of academic literature that examines the effectiveness and equity-related performance of PES initiatives targeting biodiversity conservation in tropical and sub-tropical countries. We investigate the key features of such analyses as regards their analytical and methodological approach and we identify emerging lessons from PES practice, leading to a new suggested research agenda. Our results indicate that analyses of PES effectiveness have to date focused on either ecosystem service provision or habitat proxies, with only half of them making explicit assessment of additionality and most describing that payments have been beneficial for land cover and biodiversity. Studies evaluating the impact of PES on livelihoods suggest more negative outcomes, with an uneven treatment of the procedural and distributive considerations of scheme design and payment distribution, and a large heterogeneity of evaluative frameworks. We propose an agenda for future PES research based on the emerging interest in assessing environmental outcomes more rigorously and documenting social impacts in a more comparative and contextually situated form

A Policy Maker’s Guide to Designing Payments for Ecosystem Services

Over the past five years, there has been increasing interest around the globe in payment schemes for the provision of ecosystem services, such as water purification, carbon sequestration, flood control, etc. Written for an Asian Development Bank project in China, this report provides a user-friendly guide to designing payments for the provision of ecosystem services. Part I explains the different types of ecosystem services, different ways of assessing their value, and why they are traditionally under-protected by law and policy. This is followed by an analysis of when payments for services are a preferable approach to other policy instruments. Part II explains the design issues underlying payments for services. These include identification of the service as well as potential buyers and sellers, the level of service needed, payment timing, payment type, and risk allocation. Part II contains a detailed analysis of the different types of payment mechanisms, ranging from general subsidy and certification to mitigation and offset payments. Part III explores the challenges to designing a payment scheme. These include the ability to monitor service provision, secure property rights, perverse incentives, supporting institutions, and poverty alleviation

Nature's role in sustaining economic development

In this paper, I formalize the idea of sustainable development in terms of intergenerational well-being. I then sketch an argument that has recently been put forward formally to demonstrate that intergenerational well-being increases over time if and only if a comprehensive measure of wealth per capita increases. The measure of wealth includes not only manufactured capital, knowledge and human capital (education and health), but also natural capital (e.g. ecosystems). I show that a country's comprehensive wealth per capita can decline even while gross domestic product (GDP) per capita increases and the UN Human Development Index records an improvement. I then use some rough and ready data from the world's poorest countries and regions to show that during the period 1970–2000 wealth per capita declined in South Asia and sub-Saharan Africa, even though the Human Development Index (HDI) showed an improvement everywhere and GDP per capita increased in all places (except in sub-Saharan Africa, where there was a slight decline). I conclude that, as none of the development indicators currently in use is able to reveal whether development has been, or is expected to be, sustainable, national statistical offices and international organizations should now routinely estimate the (comprehensive) wealth of nations

A data support infrastructure for Clean Development Mechanism forestry implementation: an inventory perspective from Cameroon

Clean Development Mechanism (CDM) forestry project development requires highly multi-disciplinary and multiple-source information that can be complex, cumbersome and costly to acquire. Yet developing countries in which CDM projects are created and implemented are often data poor environments and unable to meet such complex information requirements. Using Cameroon as an example, the present paper explores the structure of an enabling host country data support infrastructure for CDM forestry implementation, and also assesses the supply potential of current forestry information. Results include a conceptual data model of CDM project data needs; the list of meso- and macro-level data and information requirements (Demand analysis); and an inventory of relevant data available in Cameroon (Supply analysis). From a comparison of demand and supply, we confirm that data availability and the relevant infrastructure for data or information generation is inadequate for supporting carbon forestry at the micro, meso and macro-levels in Cameroon. The results suggest that current CDM afforestation and reforestation information demands are almost impenetrable for local communities in host countries and pose a number of cross-scale barriers to project adoption. More importantly, we identify proactive regulatory, institutional and capacity building policy strategies for forest data management improvements that could enhance biosphere carbon management uptake in poor countries. CDM forestry information research needs are also highlighted

Relaxing Constraints as a Conservation Policy

Eco-entrepreneurs in developing countries are often subject to market or institutional constraints, e.g. via credit rationing or missing markets. Conservation interventions which relax constraints may be both cost-effective and poverty reducing. A simulation using data from an intervention in Madagascar to relax the technological constraints of forest honey production investigates this possibility. Cost-effectively achieving dual environment-development goals is shown to depend on the severity of constraints, relative prices and, importantly, the nature of technology. Success is more likely for technologies exhibiting close to constant returns to scale or high input complementarity. Forest honey does not meet these requirements, whereas sustainable forest management may well do. Ultimately, where market or institutional constraints are present, knowledge of the recipient technology is required for more informed, efficient and perhaps, more politically-acceptable conservation policy

The Prospects for Payment for Ecosystem Services (PES) in Vietnam: A Look at Three Payment Schemes

Global conservation discourses and practices increasingly rely on market-based solutions to fulfill the dual objective of forest conservation and economic development. Although varied, these interventions are premised on the assumption that natural resources are most effectively managed and preserved while benefiting livelihoods if the market-incentives of a liberalised economy are correctly in place. By examining three nationally supported payment for ecosystem service (PES) schemes in Vietnam we show how insecure land tenure, high transaction costs and high opportunity costs can undermine the long-term benefits of PES programmes for local households and, hence, potentially threaten their livelihood viability. In many cases, the income from PES programmes does not reach the poor because of political and economic constraints. Local elite capture of PES benefits through the monopolization of access to forestland and existing state forestry management are identified as key problems. We argue that as PES schemes create a market for ecosystem services, such markets must be understood not simply as bald economic exchanges between ‘rational actors’ but rather as exchanges embedded in particular socio-political and historical contexts to support the sustainable use of forest resources and local livelihoods in Vietnam

The economic case for prioritizing governance over financial incentives in REDD+

This article contributes to the ongoing debate on the role of public policies and financial incentives in Reducing Emissions from Deforestation and forest Degradation (REDD+). It argues that the subordination of policies to results-based payments for emission reductions causes severe economic inefficiencies affecting the opportunity cost, transaction cost and economic rent of the programme. Such problems can be addressed by establishing sound procedural, land and financial governance at the national level, before REDD+ economic incentives are delivered at scale. Consideration is given to each governance dimension, the entry points for policy intervention and the impact on costs. International support must consider the financial and political cost of governance reforms, and use a pay-for-results ethos based on output and outcome indicators. This can be done in the readiness process but only if the latter’s legal force, scope, magnitude and time horizon are adequately reconsidered. In sum, the paper provides ammunition for the institutionalist argument that UNFCCC Parties must prioritise governance reform between now and the entry into force of the new climate agreement in 2020, and specific recommendations about how this can be done: only by doing so will they create the basis for the programme’s financial sustainability