CPWF CIAT MINAM presentation at IFAD 11-09-13

Since 1967 / Science to cultivate change

Marcela Quintero* (CIAT) Roger Loyola, Yolanda Puemape, (MINAM)* [email protected]

Designing PES in Peru: Putting research into use

Photo by Neil Palmer. CIAT


Payment for Ecosystem Services in watersheds in South America*

• 14 cases identified in 2010 at different implementation stages

• Most of them target activities that are assummed a priori to have positive impacts on ES

• Or are oriented to maintain conserved areas (precautionary principle)

* Quintero, M, ed. 2010. Servicios ambientales hidrológicos en la región andina. Estado del conocimiento, la acción y la política para asegurar su provisión mediante esquemas de pago por servicios ambientales. Lima, IEP; CONDESAN. (Agua y Sociedad, 12; Serie Panorama Andino, 1)


Main motivations to promote PES in Latin America

• Benefit sharing: To make a transfer of resources from ES beneficiaries to ES providers as a reward, for ES currently

provided.

– To tackle an uneven distribution of water-related ES benefits

• Cost sharing: To make a transfer of resources to improve

the provision of ES throughout the promotion of land use/management changes


ES benefits redistribution within the society

• Poverty incidence in Peru: 60% in the Andean region (22% in thepacific coast region) (INEI, 2007)

• Most of the water use occurs in the pacific coast region (85%) and relies importantly from thesupply of water from the Andeanregion

Source: ANA, 2009. Política y estrategia nacional de los recursos hídricos

en Peru.Lima. Perú.


Canete river basin: Ecosystem Services vs Poverty

Averaged per capita expenditures (peruvian soles)

Water Yield


20102009

MINAM chooses Canete Basin

as its pilot site for designing a

PES Scheme. CIAT, CARE and

WWF are invited to support this

initiative. CIAT is asked to

conduct respective hydrological

and economic analyses .

CIAT includes Canete as

the Peruvian study site in a

project supported by the

CPWF

CIAT conducted studies on

economic valuation and

hydrological priority areas

as inputs for PES design

TIMELINEKey fact: The Canete PES scheme is designated as the MINAM’s offical pilot case

Key fact: The existence of an explicit interest or initiative to create a PES schemes was a precondition to select study sites for the project

January

Various meetings jointly

organized between MINAM,

CIAT and CARE with

multiple local stakeholders to

socialize and receive

feedback on the PES

initiative and research

results.

2011

MINAM disseminated the PES

initiative widely and kept

supporting it even after two

changes of Ministry and one

change of government

Consevation

InternationaI joined the

PES initiative supporting

the legal analysis for

implementing the

scheme in Canete

Key fact: Legal feasibility in one of the main gaps limiting the advance towards PES negotiation


Up

pe

r basin

(40

00

-58

00

Ecosystem service provision (Water yield (mm))

1111-1507

Mid

dle

basin

(35

0–

40

00

51-256

Low

er

basin

(0

-35

0)

0-50

Peruvian case study, Canete River watershed – Current situation

Up

pe

r basin

(40

00

-58

00

River flow use (m3/s)

0 (mostly from springs)

Mid

dle

basin

(35

0–

40

00 250, 64

Low

er

basin

(0

-35

0)

Up

pe

r basin

(40

00

-58

00

Water and land uses

Extensive degrading grazing, subsistence agriculture

Mid

dle

basin

(35

0–

40

00

Hydropower companyShrimp growers

Low

er

basin

(0

-35

0)

Urban dwellersWater inefficient commercial agricultureTourists (rafting)


Desired situation: REWARDING for ES

Up

pe

r basin

(40

00

-58

00

Mid

dle

basin

(35

0–

40

00

Low

er

basin

(0

-35

0)

Transfer

part of their

benefits

Investment in

conservation

alternatives

Watershed’s

socioeconomic

asymmetries might

be balanced by this

benefit-sharing

mechanism


20102009

MINAM chooses Canete Basin

as its pilot site for designing a

PES Scheme. CIAT, CARE

and WWF are invited to

support this initiative. CIAT is

asked to conduct respective

hydrological and economic

analyses .

CIAT includes Canete as

the Peruvian study site in a

project supported by the

CPWF

CIAT conducted studies on

economic valuation and

hydrological priority areas

as inputs for PES design

TIMELINEKey fact: The Canete PES scheme is designated as the MINAM’s offical pilot case

Key fact: The existence of an explicit interest or initiative to create a PES schemes was a precondition to select study sites for the project

January

Various meetings jointly

organized between MINAM,

CIAT and CARE with

multiple local stakeholders to

socialize and receive

feedback on the PES

initiative and research

results.

2011

MINAM disseminated the PES

initiative widely and kept

supporting it even after two

changes of Ministry and one

change of government

Consevation

InternationaI joined the

PES initiative supporting

the legal analysis for

implementing the

scheme in Canete

Key fact: Legal feasibility in one of the main gaps limiting the advance towards PES negotiation


PES concept transformation…from theory to practice

• Since Wunder (2005) new PES definitions have emerged as a response to what is being happening on the ground

• Current PES-type schemes in watersheds seems to be the result of collective action and cooperation rather than the action of marketforces (supply vs. demand) (Quintero and Estrada, 2006)

• “Transfer of resources between social actors, which aims to create

incentives to align individual and/or collective land use decisions

with the social interest in the management of natural

resources”(Muradian et al., 2010)


Requirements for the RES schemes design

and implementation

• Targeting actions: What and where?

• Economic values of ES for the demand as a reference value to negotiate contributions to a ES Fund

• Willingness to pay

• Enabling the legal environment

• Enabling institutional environment


Research Highlights: Putting the pieces together for designing a PES

Where payments should be targeted to?

Identification of service providing areas using

hydrological modeling

What should be the payments amount to be made

by ES beneficiaries?

Estimation of economic value of watershed

services for different ES users:

Valuation of water-related ecosystem services*

Type of downstream

water user

Value of the

WES

Current price of

water

Irrigated Agriculture (US$

m3) 0.29512 0.023664

Tourism (US$/ind) 15.75 n.a.

Urban users

Domestic (US$ mon-1) 3.5 3.1 - 15

Commercial (US$ mon-1) 5 6.3 - 44.4

These values are reference values to be used for anticipated negotiation processes.

How payments should be used?

Ecosystem conservation measures and social

development projects.


No

9%

Si

91%

Creation of a trust fund to provide rewards and

incentives for conserving upper watershed ecosystems

Quienes deberia ser los aportantes? - Pobladores

56%

16%

13%

8%

4% 2% 1%

Agriculto res

Industria - Comercio

Recaudación publica

Hidroeléctrica

M inería

Camisea

Turismo

Who should contribute to the trust fund?


2011

Based on legal analysis

recommendations, PES

implementation actions

incorporated in the action

plan of the Natural

Reserve (upstream area).

Actors from multiple

disciplines came together to

be part of a ESS Law

discussion group led by

MINAM. CIAT/CPWF part of

the invitees

There is a final version of

the Law to be subject of

public consultation and

congress approval

2012

TIMELINE (2)

Key fact: Law discussion considered lessons learnt from practice including Canete regarding the conceptual approach, institutional bottle necks, legal constraints, etc.

Key fact: CIAT is invited by IFAD and MINAM to be part of the project formulation mission. Technical-science-based project results are taken in to account in this.

IFAD approached MINAM

with the purpose of

supporting the creation of a

Trust Fund to start up the

operation of the PES

scheme in Canete. A GEF-

IFAD project was formulated

(pending for approval)


Legal and institutional bottlenecks for implementingPES in watersheds - Peru

0 2 4 6 8 10 12 14 16 18 20

Santa

Alto Mayo

Rumiyacu, Mishiyacu y Almendra

Gera

Cumbaza

Quiroz

San Alberto-La Colina

Nanay

Rimac

Cañete

Ica-Huancavelica

Piuray

Quanda y Botijas

Jequetepeque

Cachi

Chili

Tilacancha

PRELIMINAR DIAGNOSTICO DISEÑO NEGOCIACION IMPLEMENTACION

Quintero, M., Pareja, P., Rivera, G. 2013 (Forthcoming).


Legal bottlenecks

0.00

10.00

20.00

30.00

40.00

50.00

60.00

Po

rce

nta

je (

%)

Sectores priorizados

• Inability to transfer voluntarycontribution from urban waterusers to an indenpendent Fundfor PES

• How to channel publicresources of local governmentsinto PES funds?

• How to ensure sustainability of the fund –voluntary vs mandatory?


Legal and institutional bottlenecks

• Financial independence

• Lack of trust on currentorganizations

• Lack of guidelines on how toestablish new institutionsfor operating RES (rules and organizations)

Quien debería ser el administrador del fondo - pobladores

EMAPA - Cañete

24%

Municipalidad

9%

Crear Nueva

66%

Otra existente

1%

Who should manage the ES trust fund?


RES implementation requires multisectoral coordination for operating

• There is a lack of an institutional structure for an integrated watershed management

• National policy on water resources proposed the creation of watershed councils, however the process of creation is incipient and lack a specific funding for its functioning

• How to articulate RES into future watershed councils? �intersectorial coordination and need for official guidelines

SERNANP:

National

Service of

Protected

Areas

Local water

authority /

National

water

authority


Overcoming bottlenecks for RES implementation

Proposed law

• Offical recognition of RES, eventhough are voluntary

• Definition of RES: Rewards and incentives

• Avoid perverse incentives

• Enable transfer of urban water users contributions into RES funds

• Highlights the importance of articulating PES with existing land and water use/management plans

Remaining gaps

• How to become voluntary contributions in a legally binding to ensure continuity

• Management design that guarantees independency and transparency

Canete institutional arrangement for

implementation

• Creation of ad-hod watershed committee for PES governance � transition towards watershed councils

• National organization that currently manages conservation project will manage the PES Fund

• High replicability potential


Final remarks• One such recurrent issue is community dissatisfaction (to varying degrees)

about the uneven distribution of water-related ES benefits

• In this sense, claiming a transfer of resources from ES beneficiaries is based in the current delivery status of ES and not necessarily in a need to modify an negative environmental externality (rewards vs. compensation)

• This imposes changes in conceptual and methodological approach

• This is more an institutional innovation than a market-based solution in the management of common goods in watersheds (ie.ES)

• Institutional and legal bottlenecks become crucial for enabling RES implementation

• IFAD – CIAT/CPWF collaboration: A good example of R&D alliance…putting research into use!

CPWF CIAT MINAM presentation at IFAD 11-09-13

Technology

Transcript of CPWF CIAT MINAM presentation at IFAD 11-09-13