EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES : EXPERIENCES FROM PRO-POOR REWARDS FOR...
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Transcript of EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES : EXPERIENCES FROM PRO-POOR REWARDS FOR...
EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL
SERVICES : EXPERIENCES FROM
PRO-POOR REWARDS FOR ENVIRONMENTAL SERVICES IN AFRICA (PRESA)
Sara NamirembeWith
Meine van NoordwijkDelia CatacutanLeimona Beria
PRESA Sites
ConceptsEnvironmental services • Biophysical outcomes of proper management
of natural resources• Have considerable impact on human beings
and wide natural processes.
PES (payments or rewards for environmental services) - harnessing market forces to increase positive environmental outcomes.
Redirecting development pathways towards environmental integrity
Positive incentives are needed to reward rural poor for the envirponmental services they can/do provide
RES mechanisms differ from ‘command & control’ Conditional: a “performance” basis for the rewards/payments
as opposed to entitlement
Voluntary: engagement of both ES providers and beneficiaries in a negotiated scheme through free choice at the individual level
Key aspects of RES Realistic: RES schemes based on scientifically sound
assessment of relationships of land use changes and ES provision. Feasible
Pro-poor: RES schemes must consider multiple dimensions of poverty
Context
Mechanism
+
PRESA SO FAR:Can watersheds be managed sustainably through negotiated agreements between landowners and potential beneficiaries?
REALISTIC
RES schemes based on scientifically sound assessment of relationships of land use changes and ES provision. FeasiblePropoor
Impacts of land use change - Kapingazi
Scenario Water yield (mm) Surface runoff % Base flow %
Base case 846 86 14
Convert tea farms to annual crops
936 84 16
Convert coffee farms to annual crops
864 88 12
Double built up areas
860 86 14
The impact of land use change on water yield is generally low.
Effectiveness of landuse practices on hydrology
Landuse practices
Sediment yield reduction (%)
Reduction in surface runoff (%)
Increase in base flow (%)
Contour farming with trees
49 16 8
Grass filter strips 38 - -
Grass waterway 41 - -
Terraces 85 22 10
Quantity: Soil and water conservation practices have little effect on water yieldQuality: Significant effect on sediment yield
Sasumua
Towards a business case for PWS - Sasumua
Grassed waterway (3m width by 20 km length - approx 15 acres)
Benefit to Nairobi City Water and Sewerage Cooperation Reduction in cost of alum:
Reduction in costs of desiltation of dam
Cost to 500 households
Year 1:
•Land Annual lease•Labour and grass
Year 2 onwards:
Net annual earning per household:566.4
1,725,000 1,725,000
283,200283,200
(Values in Kenya Shillings)
400,000
20% less sediment yield into Sasumua dam
Pay-back period based on constant cost of allum alone
Ulugurus Mts, Tanzania
Increasing value accruing to farmers1. Alternative payment
mechanisms - UlugurusCo-investment preferred - village infrastructure
Group payments – not likely to be successful
2. Exploiting other income flows from sustainable watershed management:
Carbon: Albertine Rift: in River Mubuku watershed
Usambaras: REDD feasibility in Sigi River watershed
Eco-certification Albertine Rift of crafts and honey
Biodiversity: Fouta Djallon
Sediment sources in Sasumua
Low erosion rates from the forest
High rates on some agricultural areas, exceeding 11.2 tons/ha per year
Reducing costs: targeting hotspots
VOLUNTARY
Both ES providers and beneficiaries in a negotiated scheme through free choice at the individual level
Are sellers willing to accept payments for ES supply?
Farmers willing to accept (WTA) payments for:
• Adopting agroforestry and other soil and water conservation actions
• enhancing water quality
BUT may underestimate opportunity costs $93/ha/y compared to model estimate of $232/ha/y (Kapingazi)
IF (Ulugurus): •Not located in the main villages/towns•They own sufficient assets - livestock
Nairobi water users - 2o beneficiaries• Willing to pay higher water tariffs
• Interested in increased and regular flow
Nairobi Water and Sewerage Cooperation - 1o beneficiary
•Burdened with multiple levies:
Water Act demands abstraction fee of 50cts/m3 (Approx KS 1m/month) to WRMA for watershed mgt.
•Not authorised to increase water tariffs
•Governance - Inadequate management
Are buyers willing to pay for ES?
CONDITIONALITYPerformance-based rewards
Western Usambaras, Tanzania
If performance will not happen without incentives
PROVIDERS
1. Performance is driven by – Perceived value of interventions at household levelPerceived value of capacity gainedNOT recurrent payments
•Ulugurus: Prototype payments, one year
•Upper Tana: UTZ coffee certification, 9 years
Risk of a crowding-out effect - Usambaras
BENEFICIARIESShort run: payments for effort based on trust – CSRLong run: rigorous proof needed
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) StewardshipEntrusting resource management to local Full trust of management plan & local monitoring with high social capital flexible contract , broad sanctions
van Noordwijk and Leimona (2010)
WHAT IS THE RIGHT MECHANISM?
van Noordwijk and Leimona (2010)
A strict interpretation of commoditized ES can be problematic.Monetary incentives may be counterproductive undermine existing norms not sufficient and/or durable
enough “Co-investment” in stead of “payment” appeals to both social and financial concepts.
CO-INVESTMENT AND SHARED RESPONSIBILITY ENTAIL
respect mutual accountability commitment to sustainable
development social exchange rather than
financial transactions.
Free and prior informed consent
Efficiency Fairness
Balancing act is needed
Sellers: • Communities• Government
s• Industry• Large-scale
investors
Buyers:Local & international companiesBanksGovernmentsIndividuals
Buyers:Local & international companiesBanksGovernmentsIndividuals
Intermediaries:RegulatorsBrokersProject developers e.g., NGOsResearchers
Intermediaries:RegulatorsBrokersProject developers e.g., NGOsResearchers
Initial interest
Effective increase
in ES
Signed contract
Exte
rnal
inve
stor
s an
d re
gula
tors
:le
arni
ng c
urve
Learning curve for local stakeholders (actors) of land use change
Smooth implemen-
tation?
Efficient + Fair reward systems require a two-way learning curve
Negotiations
WHERE TO WITH PES?
1. Continuing to generate evidence to better engage multiple actors
2. Relating to financial mechanisms at national scale. Examining •context where CES-COS-CIS apply•effectiveness/viability of private sector market-driven versus fund approach•the business case for publically funded PES
3. Examining aspects of scale and thresholds for ES supply
4. Contributing to the carbon agenda: stocks and fluxes, leakage, adaptation, co-benefits
5. Linking P/RES into food security and broader ICRAF programs such as:•Evergreen Agriculture including grasslands/Drylands•Millennium Development Goals
Thank You
Sara Namirembe ([email protected])
PRESA World Agroforestry Centrehttp://www.worldagroforestrycentre.org/sea/Networks/RUPEShttp://presa.worldagroforestry.org