ADVANCES IN PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES :

EXPERIENCES FROMREWARDS FOR, USE OF AND SHARED INVESTMENT IN

PRO-POOR ENVIRONMENTAL SERVICES SCHEME (RUPES)AND

PRO-POOR REWARDS FOR ENVIRONMENTAL SERVICES IN AFRICA(PRESA)

AND WAY FORWARD

Delia Catacutan, Sara Namirembe, Beria Leimona & Meine van-Noordwijk

Presentation Outline

• Our challenge • Synthesis of RUPES 1: Proof of concept• Activities and outputs in RUPES 2 and PRESA:

Proof of practice• Conclusions• Way forward

ICRAF’s 3 major networks of action research and learning sites on RES and climate change issues:

Pro poor Rewards for Environmental Services in Africa (2008 – 2011) covering 8 sites in 5 countries (Tanzania, Kenya, Guinea, Uganda & Malawi)

Rewards for, Use of and Shared Investment in Pro-poor Environmental Services schemes in Asia (2002-2012) covering 12 sites in 8 countries (China, Vietnam, Indonesia, Philippines, Nepal, India, plus Thailand and Cambodia - upcoming)

Global partnership devoted entirely to research on the tropical forest margins with 12 benchmark sites in the Amazon, Congo Basin and Southeast Asia

Bac Kan

RUPES SITES IN ASIA

PRESA Sites

ConceptsEnvironmental services are a collection of biophysical

outcomes that are the consequence of proper management of natural resources with considerable impact on human beings and wide natural processes.

Rather than control and command environmental policies, the concept of PES attempts to harness market forces, including the global community to increase positive economic and environmental outcomes.

Redirecting development pathways towards environmental

integrityPositive incentives are needed to reward rural poor for the envirponmental services they can/do provide

Free and prior informed consent

Efficiency Fairness

Balancing act is needed

But PES actors are highly heterogeneous-- policy-makers and regulators and private sector as ES buyer, intermediaries, and local communities as ES providers have different knowledge, perceptions and ambitions which they all use to justify their individual actions.

And PES is knowledge-intensive!

Initial interest

Effective increase

in ES

Signed contract

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Learning curve for local stakeholders (actors) of land use change

Smooth implemen-

tation?

Efficient + Fair reward systems require a two-way learning curve

Negotiations

RES mechanisms differ from ‘command & control’ Conditional: a “performance” basis for the rewards/payments

rather than an entitlement based on nominal entities

Voluntary: engagement of both ES providers and beneficiaries in a negotiated scheme through free choice at the individual level

RUPES 1 Synthesis

Knowledge and understanding of context: Realistic: RES schemes are based on scientifically sound

assessment of relationships of land use changes and ES provision.

Pro-poor: RES schemes must consider multiple dimensions of poverty

Context

Mechanism

Payment for Environmental Services (PES) or Co-Investment in Environmental Stewardship

Co-investment and shared responsibility for stewardship, with a focus on “integrative livelihood assets” (natural + human + social capital) rather than only financial can be expected to provide future flows of ES

Current findings show that per-capita financial transfer from PES remain small

Collective actions, social mobilization and secure land access are main components and can act as conditional RES and reduce poverty

Outcomes &Impacts

+

=

CES: Commoditized Environmental ServicesDirect interaction of ES providers & beneficiariesRecurrent monetary payments based on supply and demandNo explicit poverty targetActual ES delivery & direct marketability

COS: Compensating for Opportunities Skipped Paying for accepting restrictionsAchievement of a condition or effortPoverty target added with certain conditions

CIS: Co-Investment in (landscape) StewardshipEntrust the local resource management Full trust of management plan & local monitoring with high social capital flexible contract , broad sanctions

van Noordwijk and Leimona (2010)

Replicable tools for assessment, negotiation and design of R/PES schemesRapid Hydrological Assessment (RaHA)Rapid Carbon Stock Assessment (RaCSA)Rapid Biodiversity Appraisal (RaBA)Participatory Landscape Appraisal (PaLA)Rapid Tenure Assessment (RaTA)Reverse auctionsOthers (visit:http://www.worldagroforestry.org/sea/projects/tulsea)

• Efficiency principleRealistic: causal pathways to enhance ES are clear, real opportunity + implementation costs are offset, or

benefits outweigh the costs Conditional: performance-based contracts, agreed

MRV system for monitoring, reporting and verification• Fairness principle Voluntary: meets the Free and Prior Informed

Consent standards; willingness to accept responsibilities

Pro-poor: at minimum not increasing inequity, attention to gender balance

RUPES 2 – Rewards for, Use of and Shared Investment in Pro-poor Environmental Services

Goal: Rewards for provision of environmental services flow to poor people in an Asian context.

Outputs, impacts and

lessons

Singkarak•Community based- voluntary carbon market•Potential organic coffee •Environmental Education Centre•Agro-ecotourism•Integrated Lake Management with Ministry of Environment•Supported by FAO RAP – Assisted Natural Regeneration to combat Imperata grassland

Aceh •Contributing to Green-growth economy after recovery from tsunami•Coordinated by UNESCAP & WWF Indonesia

Sumberjaya• A performance-based reward for sedimentation reduction from HEP•Scale up to watershed level for collective financial reward•Selected as a best practice for a national GEF-UNDP project coordinated by MoF

Cidanau

• An activity-based reward for watershed ES from private companies•Financial reward for local infrastructure and smallholder business improvement•Extension and scaling up at provincial level • Supporting local intermediary: Communication Forum of Cidanau

Bungo•Rubber eco-certification •Improving the quality of smallholder rubber production •Supported by Bridgestone•Collaborating with Indonesian Institute of Ecolabeling

Kuningan •Local level rewards for watershed services•Supporting a local NGO: KANOPI•Policy advocacy RES between districts

Kapuas Hulu

•Scoping study on watershed hydrological function using RHA tool •Supporting the consortium WWF-CARE-IIED

Dieng•Scoping study on RES feasibility at a horticulture-rich but severely degraded watershed •Food security issue on potato farming•Supporting Safe Dieng NGO

Central Sulawesi• IFAD Investment Project site with Ministry of Agriculture•Collaboration with Mars Symbioscience Indonesia to improve the cocoa agroforestry and promote RES scheme for smallholders.

Lombok

•Community based- forest management•Gender study on role of women’s knowledge in increasing the sustainable NRM •Supporting a local NGO to monitor an established RES for providing good water quality for urban dwellers.

INDONESIA

PHILIPPINES AND VIETNAM

Bac Kan•Supporting the PDD of REALU projects•Developing RES scheme for forest ES•Improving existing ecotourism scheme

Bakun• Collaborating with Cordillera Highlands Agriculture Resource Management Project • HEP royalty benefit-transfer to local indigenous group

Kalahan

•Voluntary carbon market scheme by Ikalahan indigenous group in collaboration with FAO RAP•Supported by Mitsubishi company in developing carbon Project Identification Note•Potential bundling ES with watershed and biodiversity conservation •A best practice site for forest protection and NTFP marketing

Lantapan• A case study of water rights and conflicts• A sentinel site for Landcare• Supporting policy advocacy of RES , and RES design at district level

Loktak Lake Floodplain wetlands with unique floating lands called

phumdis i.e. thick mats of vegetation intermixed sediments Presence of Keibul Lamjao National Park for globally

threathened species of Brow Antlered Deer Construction of Ithai barrage of HEP converted a naturally

fluctuating lake into a reservoir Wetlands India and Loktak Development Authority :

restoration strategies

Shivapuri-Nagargun National Park (SNNP)• Managed by Department of National Parks and Wildlife

Conservation (DNPWC)• a major source of drinking water in Kathmandu (around 21% of

piped water) other services: HEP plant, irrigation, tourism• Two villages inside the park

Park-people conflict (wildlife, no access to forests)• Collaboration with ICIMOD

Kulekhani Watershed Hilly region watershed extends over 8 VDCs Community forestry – on hill slopes, intensive agriculture on

the slopes Hydropower station below – reservoir based 17% of hydropower in the country (92 MW) Government royalty collected from Hydropower generation

by NEA; 12% channeled back to the district Collaboration with ICIMOD

Tibet Plateau

Incentivizing improved management of both degraded and un-degraded grasslands.

Conditional on maintaining sustainable stocking levels on lands to which herders have legal use rights.

NEPAL

• The development of reward for ecosystem services schemes for grass land by the China’s State Council in 2007, China

• Ecological land use plan for Xishuangbanna Prefecture 2010, China

• The Indian National Environment Policy on the role of economic incentives for environmental conservation in 2006.

• The Indonesian Environmental Protection and Management focusing on economic instruments for ecosystem services: Act No. 32/2009 and regulations of the Ministry of Forestry on Reducing Emissions from Deforestation in Developing Country (REDD).

• The Nepali Leasehold Forestry Policy in 2002: degraded forest is leased for 40 years (renewable) to groups of poor households as a resource base for their exclusive use.

• The draft of Philippines Climate Change Act of 2008 and a final review of Sustainable Forest Management Act (SFMA) in 2008.

• The Vietnamese Decision No. 380/QD – TTG: ES buyers should pay ES providers

National level impacts

Making a case forWatershed service rewards

Sara Namirembe

This programme is implemented by the World Agroforestry Centre, with funding from the International Fund for Agricultural Development, the European Commission and the government of Finland. The views expressed in this presentation do not

necessarily reflect the views of the funders.

Focus

Can watersheds be managed sustainably through negotiated agreements between landowners in targeted hotspots and potential beneficiaries?

PRESA seeks to generate evidence on feasibility of rewards for environmental services (RES) through action research at local level to inform and influence actions at landscape and country levels

Analysis of watershed service payments

RES principle Issues

Realistic Hydrologically effectiveFinancially affordable

Voluntary Sellers willing to accept payment; Buyers willing to pay

Conditional Performance based contracts/agreements

Propoor Does no harmImproves the lives of the poor