Payments For Environmental Services Schemes Research Articles

Broadening the picture: Negotiating payment schemes for water-related environmental services in the Netherlands

This paper explores how the development of payment schemes for water-related environmental services can be understood and supported. Currently, the development of such payment schemes is perceived mainly through theoretical lenses offered by economists and hydrologists. Notwithstanding the usefulness and appropriateness of these theoretical lenses, they have difficulties to accommodate certain aspects of the development of payment schemes for water-related environmental services. Specifically, the discussion of negotiation aspects remains relatively isolated and superficial, even though it is generally acknowledged that the development of payment schemes is often significantly influenced by political negotiations. This paper addresses this limitation. It shows how the main elements of negotiation analysis can provide a theoretical underpinning for important drivers behind the development of specific payment schemes, which are beyond the scope of hydrological or economic rationality. Four cases of water-related payment schemes in the Netherlands are studied, employing one of the key insights offered by negotiation analysis: the importance of the underlying interests and values of the parties involved. The findings of these four cases show the potential of negotiation analysis as a useful complement for understanding and supporting the development of payment schemes for environmental services.

For services rendered? Modeling hydrology and livelihoods in Andean payments for environmental services schemes

In the Andes, demand for water is growing and upland land-use changes are increasing. Water quality, quantity and seasonal flow have thus also become environmental services with potential monetary value. Yet, currently the region's pioneer PES schemes are not paying for measured environmental services, but for proxy land uses thought to provide the(se) service(s). Hydrological modeling makes explicit the tacit causal relationships and tests underlying assumptions. Ideally, when combined with an economic analysis of land-use alternatives, this could inform decision makers on how much to pay for different interventions in different spatial locations. This paper focuses on two Andean watersheds: Moyobamba (Peru) and Pimampiro (Ecuador). In the first case, a municipal water company is preparing a payment for environmental services (PES) scheme to reduce upstream sediment loads. In the second, a similar conservation-oriented municipal PES scheme has operated since 2000, but the hydrological linkages have never been tested. Applying the Soil & Water Assessment Tool (SWAT), we identify in both watersheds biophysically critical areas for service delivery, and compare services for current land uses with change scenarios: deforestation, reforestation, live barriers, and agroforestry. We then use the ECOSAUT optimization model to predict net economic benefits for service providers. In Moyobamba, switching to shade-grown coffee would halve sediment yields, and increase significantly farmers’ economic benefits. This requires high up-front investment, but the willingness to pay of water users in Moyobamba town may suffice to cover the upfront costs. In Pimampiro, resumed deforestation would increase sediments by >50% and reduce dry-season flow by 0.5%, thus reinforcing the rationale of the existing PES scheme, focused on conserving native forests and grasslands.

The miombo woodlands at the cross roads: Potential threats, sustainable livelihoods, policy gaps and challenges

AbstractThe Miombo, the most extensive tropical woodland formation of Africa directly supports the livelihoods of over 100 million people through the provision of many tree products and ecosystem services essential to both the rural and urban communities. While the destruction of the Miombo has often been blamed on the rural communities dwelling near the forest resources, many urban dwellers depend heavily on the various products derived from the woodlands. This paper highlights the importance of the Miombo in the livelihoods of rural people, the potential threats to this ecosystem and opportunities for its sustainable management. About 70% of energy consumed in southern Africa is in the form of fuelwood or charcoal. The economic importance of the Miombo especially from non‐timber forest products (NTFPs) is usually understated due to their perceived non‐economic value yet they play an important role in sustaining livelihoods of forest dependent people in the miombo ecoregion. The Miombo also contributes to health services through the use of medicinal plant and products, in some cases, contributing up to 80% to rural health, including helping in coping with effects of HIV/AIDS, malaria and several diseases. The possibility of developing payment for environmental services schemes through public–private partnerships, and community‐based sustainable management models are proposed. Through conservation and commercialization of some of the products and services, there is a potential to provide income and improve the livelihood of people involved in the trade along the value chain.

Payments for environmental services in upper-catchments of Vietnam: will it help the poorest?

Payments for Environmental Services (PES) schemes present a new approach that creates a conditional benefit transfer between upland providers of environmental services and the downstream beneficiaries of these services. Such schemes can take the advantage of upland-lowland interactions in generating environmental benefits while improving the livelihoods of upper-catchment agricultural households. The past few years have witnessed a surge of interest in the development of PES schemes in Asia. The Vietnamese Government expressed recently its interest in starting such a scheme to protect fragile upper-catchments whose degradations are causing problems, among others, on hydro-electric infrastructures. Northern provinces of Vietnam are characterized by biophysical, social, and cultural diversity. The region suffers from severe environmental problems such as deforestation, soil degradation, and loss of biodiversity. As a result, the livelihoods of agricultural households may be unsustainable. Moreover, they are also producing negative externalities for lower parts of the countries. However, households in upper catchments are heterogeneous because they have unequal access to natural resources. The upper-catchments are generally composed of a narrow bottom-valley, where irrigated rice fields are found, and of surrounding sloping land with upland rice, maize and cassava. The differential access to those compartments of the watershed has some important consequences in terms of household farming practices and livelihood strategies. The proposed paper is organized in two parts. The first part reports farm household surveys and proposes a typology of farmers living in two typical small watersheds. The second, through a simplified model of farms analyses how the poorest households would respond to such a PES scheme. Results of farm surveys showed that access to lowland paddies is uneven among agricultural households. Even in situations of apparent abundance of water, an important share of the villagers had little access to water during the months where it would be critically needed to cultivate a second rice crop. Therefore, watershed governance has far-reaching consequences that need to be recognized. We developed a recursive dynamic model shifting cultivators that integrated the dynamics of soil fertility over time and farmers decisions in order to analyse their potential participations in PES schemes. We simulated farmers without paddy land, and without access to markets. The model predicted that unless in-kind grain transfers are feasible, studied agricultural households are unlikely to participate voluntarily into a land retirement program. Overall, there is no easy solution to tackle both environmental and welfare issues of poorest potential suppliers of environmental services in the upper-catchments of Northern provinces of Vietnam, especially when they do not have access to markets.

Payments for environmental services in upper-catchments of Vietnam: will it help the poorest?

Payments for Environmental Services (PES) schemes present a new approach that creates a conditional benefit transfer between upland providers of environmental services and the downstream beneficiaries of these services. Such schemes can take the advantage of upland-lowland interactions in generating environmental benefits while improving the livelihoods of upper-catchment agricultural households. The past few years have witnessed a surge of interest in the development of PES schemes in Asia. The Vietnamese Government expressed recently its interest in starting such a scheme to protect fragile upper-catchments whose degradations are causing problems, among others, on hydro-electric infrastructures. Northern provinces of Vietnam are characterized by biophysical, social, and cultural diversity. The region suffers from severe environmental problems such as deforestation, soil degradation, and loss of biodiversity. As a result, the livelihoods of agricultural households may be unsustainable. Moreover, they are also producing negative externalities for lower parts of the countries. However, households in upper catchments are heterogeneous because they have unequal access to natural resources. The upper-catchments are generally composed of a narrow bottom-valley, where irrigated rice fields are found, and of surrounding sloping land with upland rice, maize and cassava. The differential access to those compartments of the watershed has some important consequences in terms of household farming practices and livelihood strategies. The proposed paper is organized in two parts. The first part reports farm household surveys and proposes a typology of farmers living in two typical small watersheds. The second, through a simplified model of farms analyses how the poorest households would respond to such a PES scheme. Results of farm surveys showed that access to lowland paddies is uneven among agricultural households. Even in situations of apparent abundance of water, an important share of the villagers had little access to water during the months where it would be critically needed to cultivate a second rice crop. Therefore, watershed governance has far-reaching consequences that need to be recognized. We developed a recursive dynamic model shifting cultivators that integrated the dynamics of soil fertility over time and farmers decisions in order to analyse their potential participations in PES schemes. We simulated farmers without paddy land, and without access to markets. The model predicted that unless in-kind grain transfers are feasible, studied agricultural households are unlikely to participate voluntarily into a land retirement program. Overall, there is no easy solution to tackle both environmental and welfare issues of poorest potential suppliers of environmental services in the upper-catchments of Northern provinces of Vietnam, especially when they do not have access to markets.

Payment schemes for environmental services in watersheds in Ecuador

Payment schemes for environmental services in watersheds (PES) comprise a payment or direct compensation, by the users of the service, for the maintenance of an environmental service related to water supply, availability and/or quality. The logic of this approach is the idea that healthy ecosystems such as forest and highlands (páramos) provide hydrological services. This paper describes the main payment schemes for watershed services developed in Ecuador. It presents their objective and scope, as their main results and impacts. Therefore presents common elements to all experiences like lessons learned and future perspectives. The available information does not allow to quantify the impact of the payments or compensations, either in terms of the hydrological services provision or the service providers well being. Nevertheless, the stakeholders perceptions given through interviews, show that there is a positive impact in the providers welfare and in the ecosystems health.

Developing result-orientated payment schemes for environmental services in grasslands: Results from two case studies in North-western Germany

Semi-natural habitats resulting from a long history of traditional low-intensity farming systems have undergone a dramatic decline in both quantity and quality in Europe over the last decades. There is evidence that semi-natural habitats including grasslands play an important role in providing goods and services that are of high value to human society. Preserving species diversity in these agricultural habitats and the services it provides requires compensation payments to farmers through agri-environmental subsidies. Since 1992, Agri-Environmental Schemes (AES) are important components of the second pillar of the Common Agricultural Policy (CAP). In this context, result-orientated payments are a relatively novel approach aiming to provide incentives to conserve semi-natural grasslands. In contrast to action-orientated payments, the subsidy amount is directly linked to the ecological result. Here, we first introduce AES that employ result-orientated payment schemes to conserve agricultural biodiversity. We present results from two case studies in North-western Germany that use vascular plants as indicators for high-value grasslands within a result-orientated payment scheme. The sets of indicators used were defined independently for both case studies, but were generally suitable to identify species-rich grassland communities and proved to be explicable to farmers. Second, we introduce a result-orientated payment scheme that further integrates market mechanisms. In order to improve the cost-effectiveness of AES, a regional market for biodiversity is established by means of an auction-based payment scheme.

The Efficiency of Payments for Environmental Services in Tropical Conservation

Payments for environmental services (PES) represent a new, more direct way to promote conservation. They explicitly recognize the need to address difficult trade-offs by bridging the interests of landowners and external actors through compensations. Theoretical assessments praise the advantages of PES over indirect approaches, but in the tropics PES application has remained incipient. Here I aim to demystify PES and clarify its scope for application as a tool for tropical conservation. I focus on the supply side of PES (i.e., how to convert PES funding into effective conservation on the ground), which until now has been widely neglected. I reviewed the PES literature for developing countries and combined these findings with observations from my own field studies in Latin America and Asia. A PES scheme, simply stated, is a voluntary, conditional agreement between at least one "seller" and one "buyer" over a well-defined environmental service--or a land use presumed to produce that service. Major obstacles to effective PES include demand-side limitations and a lack of supply-side know-how regarding implementation. The design of PES programs can be improved by explicitly outlining baselines, calculating conservation opportunity costs, customizing payment modalities, and targeting agents with credible land claims and threats to conservation. Expansion of PES can occur if schemes can demonstrate clear additionality (i.e., incremental conservation effects vis-à-vis predefined baselines), if PES recipients' livelihood dynamics are better understood, and if efficiency goals are balanced with considerations of fairness. PES are arguably best suited to scenarios of moderate conservation opportunity costs on marginal lands and in settings with emerging, not-yet realized threats. Actors who represent credible threats to the environment will more likely receive PES than those already living in harmony with nature. A PES scheme can thus benefit both buyers and sellers while improving the resource base, but it is unlikely to fully replace other conservation instruments.

Environmental services and land use change in Southeast Asia: from recognition to regulation or reward?

Awareness of environmental services and land use change in Southeast Asia is high among scientists, policymakers, and society. In the case of transboundary smoke, the level of awareness and concern in the region is high, but subsides in between periods of ‘crisis’. Although there is a rising level of awareness of habitat loss and associated loss of genetic diversity, the basic cause–effect relationships underlying the ecological roles of biodiversity are still debated. Degradation of watershed functions is the most mature of our three meso-scale environmental topics; indeed it shows signs of being ‘fossilized’ by vested interests in the present consensus. Land use planning and other regulatory approaches have had little success. Policy instruments for achieving meso-level environmental policy objectives through changing incentives such as payment schemes for environmental services, have not been tested widely in Southeast Asia (or anywhere else). Further research and experimentation needs to incorporate strategic consideration of processes and spatial scales of environmental impacts and resource governance. © 2004 Elsevier B.V. All rights reserved.