Overview of Payment for
Ecosystem Services (PES)
Building Multi-Sectoral Stakeholders to access
PES
Context for Payment • Land tenure
for Ecosystem
mechanisms for
Services & Products communities to protect
ecosystems and
coordination with
government
• Responsibility
(protection services)
and Rights (opportunity
to earn)
• Increased interest from
private sector, gov’t to
invest. But how???
What is Payment for Ecosystem Services (PES)
• Ecosystem services (products too!) can include
water, soil, biodiversity, carbon/carbon sequestration,
flooding control, eco-tourism. Products can include
forest and pasture products, fuel wood, food,
medicine, etc.
• Payment can include cash payments as well as other
types of benefits such as land tenure, social services,
technical assistance to improve livelihoods and
incomes.
• PES = benefit (cash or other) provided to purchase
one or more ecosystem services or products
Categories of Payments/Rewards for
Ecosystem Services
• Grants, donations from donors/individuals (development
projects to support conservation, climate adaptation, poverty
alleviation)
• Investment by the private sector for specific ecosystem services
(carbon credits, water, biodiversity)
• Local tax revenues and legal rights directed to communities that
conserve watersheds and other critical ecosystems needed by a
broad range of citizens
• Product buying linked to conservation and/or fair trade (goods
and services purchased by companies and consumers often
using a certification mechanism)
Types of PES and Example Standards & Markets
• Carbon – We have trees/forest so how do we get money for the
carbon sequestration. Could be international carbon markets –
REDD and REDD Plus through Voluntary Carbon Standard
• Biodiversity – Philippines is a biodiversity hotspot, how can we
be compensated for conserving this unique biodiversity? Climate, Community and Biodiversity (CCB)
• Energy products and changes in agriculture practices –
Clean Development Mechanism (CDM) and Gold Standard
• Water – We are watershed management groups, how do we get
compensated for protecting the watershed that provides water
for lowland communities? – Philippines Local Government
Authorities.
• Forest Products (timber and non-timber forest products – Are
there sustainable enterprises we can pursue? - Traditional
grant and local bank credits. Certification programs.
Goal of this
Presentation
•One can see the types
of PES and range and
complexity of markets
cannot be fully
addressed today.
•Instead our goal is to
introduce everyone to
the concept and types of
markets we plan to
explore with all the
stakeholders over the
course of the project.
Product Examples Linked to Certification and
Branding
Pros
• Growing demand among
buyers - traceability
• Creates Specialty Products
• Promotes higher product,
conservation and governance
standards
• Positions groups for
ecosystem services markets
Cons
• Third party audits,
expensive to maintain
• Heavy up front capacity
building
Nepal NTFP Enterprises and Community Forestry
Communities obtain Forest Stewardship Council
(FSC) Certification
• $737,049 in product sales in 2009 from FSC certified forests
• Strategic partnerships with Aveda, S&D Group, and two others
being negotiated
• Sustainable Himalayan BioTrade Group formed – consortium of
private sector community owned businesses that hold FSC
certification
• Companies raising profile for PES in international forums, trade
shows, and industry events
• A total of 32,429 Community Forestry members including
10,502 women have received training in forest management,
certification and enterprise development
PES Linked to Local Tax Revenues and Tenure
Rights - Philippines
• Implementation of
community forestry land
tenure rights (CBFM
program)
• Inclusion of CBFM
representatives on
government task forces access to tax revenues and
infrastructure development
• Local “grants” mechanism of
Provincial governments
• Voice to articulate
importance of ecosystems
services and explore other
tax-based revenue
Philippines “local taxes” PES Example
• 312,135.97
hectares in 133
CBFM sites in
Region 2 and
Palawan protected
• Php 8 Million for
CBFM activities tied
to ecosystem
services including
biodiversity
conservation
Investment by the private sector for specific ecosystem
services (carbon credits, water, biodiversity)
• Carbon: REDD, REDD Plus,
VCS, CDM (few formal deals
worldwide, but dozens of
informal deals, most of which
will not meet emerging formal
market standards. Deals going
forward need to meet VCS or
CDM standards.
• Water: Deals often with local
and regional water authorities or
government entities.
• Biodiversity: CCB standard, but
finding markets still an effort
Grants, donations from donors/individuals
(development projects to support conservation,
climate adaptation, poverty alleviation)
• Thank you USAID – Philippines! This project is
helping to provide the much needed technical
assistance to bring the stakeholders together, put in
place improved NRM and explore and access
conservation markets, including PES mechanisms.
• Grants, donations, and donor/individual support are
still the major sources of funded to get PES deals
organized and moving.
Conclusion
• Payment for ecosystem services involve fundamental shifts in
nature, wealth and power dynamics (stakeholders have to
collaborate in new ways)
• Long term horizon needed to shift the dynamics and access full
range of markets, but case evidence shows it is possible
• Need to combine four major categories of PES
– donor,
– local government tax revenues, and
– market based traditional services/product sales (includes
certification programs – FSC, Wildlife Friendly, etc.), and
– Newer PES marker; e.g. carbon markets
Conclusions Continued
To access PES markets:
•
•
•
•
•
Take time to bring stakeholders together and conduct careful
facilitation; some stakeholders will be reluctant – be persistent!
Help the stakeholders to better understand, prioritize, and coordinate
activities to abate threats to forests and access PES markets.
Strategize on ways to abate threats and become attractive to PES
markets; trust grows as stakeholders work together on threats and
market opportunities.
Produce permanent functioning multi-stakeholder groups who have the
authority and clear and informed consent of the stakeholders to
negotiate PES deals.
Don’t forget business basics. Evaluate any PES deal based on projects
costs, revenues, and risks.