A review of payments for environmentalservices (PES) experiences in Cambodia

Sarah Milne, Colas Chervier

Colas ChervierPhD student

CIRAD

colas.chervier@gmail.com

Content: 4 topics

1. Role and extent of diffusion of PES concept

2. Definition of PES in the Cambodian context

3. Performance of Cambodian PES

4. Emergence and design of PES

ON THE ROLE AND THE EXTENT OF DIFFUSION OF PES CONCEPT IN CAMBODIA

« Soft » diffusion of the PES concept

• In official documents– LIMITED to some government-endorsed strategies as

“innovative financing mechanisms” or as “redistribution mechanisms” for REDD+ money

– NO specific legal framework for PES, but some attempts to develop one (watershed PES)

• As ideas and discourses– BROAD diffusion: from the international sphere

(INGO) and through key officials and up to very high ranking government sphere (PM)

– CONTRASTING opinions and views (opposed, skeptical, promoters)

« Hard » diffusion (1/2): small-scale pilot projects

3 types of PES schemes with:• different overall characteristics (ES, buyer)• different levels of implementation: some

processes are frozenES type Project Implementer Payee Payer

Biodiversity PES Community-based

EcotourismWCS Village fund Tourists

Agri-environment Payments WCS Individual farmersUrban consumers, hotels

and restaurants

Direct payments schemes for

bird nest protection, WCS, WWF, Birdlife Individual villagers NGO

Direct Contracts for Turtle

Nest ProtectionCI Individual villagers NGO

Conservation incentive

agreementsCI, Poh Kao

Commune fund and

individual villagersNGO

Watershed PES

NB. not yet operational

Payments for fresh water

provisionWildlife Alliance / MoE Not determined Not determined

Watershed protection for

hydro-power in Cardamom

Mountains

FFI / MoE & FA Not determined Not determined

REDD pilots

NB. not yet operationalOddar Meanchey Community

Forestry REDD+ ProjectPACT / FA Stopped

Voluntary Carbon market

(certified)

Seima Protection Forest

REDD+ PilotWCS / FA CF and the RGC

Voluntary Carbon market

(certified)

Biodiversity PES

Watershed PES

REDD+ demonstration activities

Village within 5Km buffer

PES area (5 Km buffer)

PA boundaries

PA 5km buffer

« Hard » diffusion (2/2): low significance

Located around some PAs Low diffusion as compared to CF and PAs Target small-scale threats associated with family agriculture

Inland coreCardamom landscape CCPF

Area inside protected area (Ha) 1193088 401313

Area under PES contract (Ha) 35500 35500

% area 3,0 8,8

Population within a 5km buffer (# households 2011) 36182 2132

Population receiving PES (# households 2011) 1119 1119

% population 3,1 52,5

ON THE DEFINITION OF PES IN THE CAMBODIAN CONTEXT

In discourses: no common understanding

• No common understanding of the concept of PES

– BROAD: any scheme that entailed a monetary transfer for the purposes of conservation from an ‘innovative’ or non-public source of financing

– NARROW: PES to exist only in the context of watershed management schemes (user-pay)

• Limited links with any “written” references

– NO legal framework

– LIMITED knowledge of the scientific literature on PES

In practice: a broad “church”

Scheme Directness of transfer Level of commodificationImportance of the economic incentive vs. other interventions

Conservation agreements

(2006 - )

+

CI

Commune & CBOs

individual farmers

(Non-voluntary)

+

Compliance with land-use, non-logging & non-hunting rules (livelihood, law)

Level of payment do not depend on level of ES / effort

+

Mix of communal in-kind and individual in-cash payments

Community-based institutions

Strong law enforcement

Turtle nest direct payments

(2008- )

+++

CI

individual farmers(voluntary)

++

Stop harvest eggs & protection of nests (tradition)

# hatchlings

+++

Monetary and individualpayment

• Diversity of ES and institutional arrangements (see the 3 types of PES)

• 2 main and quite different approaches amongst existing schemes (see below)

• One common point: they do not correspond to the Coasean bargaining mechanism although they involve some levels of conditionality and the transfer of incentives

ON WHAT WE KNOW ABOUT THE PERFORMANCE OF CAMBODIAN PES

Quantitative impact assessments

• Several attempts to implement rigorous methods, only one succeeded: – Rigorous = counterfactual methods such as matching– Reason = lack of appropriate data, evaluation design is

not built in (project-based approach and financing), costly

• Results of Clements et al.– Positive environmental outcomes which depend on

whether the “outcome that is rewarded actually reflects conservation needs”

– Neutral or positive social impacts, depending on the scheme and the level of individual payment

Governance and institutional evaluation

• Transaction costs:– Different levels according to the type of scheme (individual vs.

collective) and the stage of implementation– Investment in setting up local institutions may have longer term

effects

• Property rights: – Not a prerequisite but necessary on the longer run

• Impact on local governance: – Strengthening collective action vs. strengthening preexisting

power asymmetries

• Distributive fairness: – Generally not equal even for collective schemes which are

supposed to reach more people– Lower access to the poorest– This is a problem because it is linked to environmental outcomes.

Sustainability: an emerging field

• Overlooked issues although it makes sense as the funding sources for these types of schemes are not ensured

• Emerging evidences (now these schemes are older):

– Long term impact evaluation and impact heterogeneity over time (e.g. interactions with the last land titling program)

– Impact on motivations and crowding out

ON THE EMERGENCE AND DESIGN

Re-conceptualizing PES design (1/2)

• Design framed by a donor-funded project designed and coordinated by an international conservation NGO– SPES project / FFI / EU– Cardamoms conservation / CI/ AFD

• PES project as a way to engage other stakeholders in conservation

• Works as a negotiation arena aime at dealing with a number of controversial questions:– The “distribution of economic burdens and benefits” from the

use and conservation of NR (e.g. who pays in watershed PES)– Rarely about the choice of PES vs. another instrument or about

the social optimum (see how CBAs are designed)

Re-conceptualizing PES design (2/2)

• Different positions / interests of « negotiators »– Not based on a simple maximization of personal benefits or the

benefits for the society– Rather influenced by:

• Many ideas and discourses (e.g. different views about the conservation-development nexus)

• The institution’s mission and strategy (e.g the NSDP of the RGC)• Several hierarchical and financing « patrons » interests (e.g. voters, donors)

• Importance of power relations in influencing the compromise:– The Prime Minister’s public speech hierarchy linked to position and

legal framework– NGO power to maintain PES in the negotiations financial and

network resources

Different types of decision situation

• Level of “politics”: – number and nature of government agencies involved

• Level of legalization: crafting PES in preexisting legal framework– Beyond links with land policies

• Level of Transaction costs: influenced by the type of scheme and influence the pace of negotiations, justify the project-based approach.– Production of data (ES, CBA); gathering people– Setting up local institutions

Probably explain the “duration of negotiations”

CONCLUSION

Gap between theory and practice: • PES do not naturally come into being, driven by supply and demand• but rather require considerable political and discursive work, institution-building

and donor funding to become established• PES originates from reaching a compromise out of contrasting interests

Implications & risks associated with the nature of the emergence processes• Process can be slow and inefficient (cost a lot of money for nothing), particularly

when many parties and interests are involved.• The environmental effectiveness and efficiency promises of PES may not be met

(not ideal targeting and arrangement)• On the other hand, decisions may benefit a few, reinforce wealth inequalities.

Different requirements in terms of political and financial inputs• depend on the type of scheme negotiated:• how the distribution of costs and benefits from the use and the conservation of NR

is envisioned • how large these changes are.

Possible levers are:• Filling gap of knowledge regarding the effect of PES (upstream and downstream)

and clarifying its definition• Focusing on diffusing supporting ideas and discourses (“lobby”)