Payments for Ecosystem Services: Getting Started. A Primer - UNEP

Payments for Ecosystem Services: Getting Started
A Primer
Payments for ecosystem services are not designed to reduce
poverty. Rather, PES primarily offer economic incentives to foster
more efficient and sustainable use of ecosystem services.
There are, however, opportunities for designing PES which can enable low-income
people to earn money by restoring and conserving ecosystems. This is a critical selling
point, because many rural people earn their living from natural resource-based activities,
such as forestry and farming. Short-term incentives exist for unsustainable forestry
and farming practices, which can draw down natural capital and limit options for future
development. In certain contexts, PES can present new incentives for sustainable
management — in the form of regular payments for ecosystem services. These regular
payments could in turn promote long-term sustainable use and even conservation of
the resource base by providing both a reliable source of supplemental income and
additional employment in the community. Even a modest payment, reliably delivered over
many years, may in certain contexts provide a meaningful increase in net income as well
as a mechanism for adopting more sustainable land management. The relationships
between PES and poverty reduction are explored further in Boxes 5 and 6.
BOX 5
Pro-Poor Payments for Watershed Services
”Payments for Watershed Services (PWS) currently exist in Costa Rica, Ecuador, Bolivia, India, South Africa, Mexico, and the
United States. In most of these cases, maximizing watershed services through payment systems has led to poverty reduction.
“While there is clear potential for tradeoffs between poverty reduction and watershed services goals, practitioners and
policymakers around the world have already shown that they can design and implement PWS programs that minimize these
tradeoffs. Indeed, because PWS initiatives are (by defi nition) voluntary, because they involve transfers of wealth (often from
wealthier urban areas to poorer rural areas), and because they can empower the poor by recognizing them as valued service
deliverers, PWS schemes are actually more likely to have pro-poor impacts than most other environmental management
interventions.”
Excerpted from: Asquith et al. 2007; L.A. Bruijnzeel and Meine von Noordwijk. 2007; C. Agarwal and P. Ferraro. 2007.
In exploring PES, it is important to remember that you can structure deals for
individuals, entire communities, or both — depending on the situation. Regardless
of who the deal is structured to benefi t, however, positive “ripple effects” — such as
increased local economic development and improved natural resource productivity —
can fl ow to a number of benefi ciaries. That is, over the lifespan of PES agreements,
communities are also likely to derive additional indirect benefi ts from the regulating
and supporting services these ecosystems deliver, such as water purifi cation, natural
hazard buffering, fl ood regulation, and others.
PES can also be established to contribute to the formalization of resource tenure and
the clarifi cation of property rights. Since PES schemes explicitly recognize the role of
environmental stewards, PES agreements could strengthen rural peoples’ position in
other resource-based negotiations.
The key is to carefully consider the benefi ts that a community, group of sellers, and/or
individual sellers of ecosystem services are interested in during the design stage of a
PES deal.
10