jp8589 WRI.qxd - World Resources Institute

WORLD RESOURCES 2005
108
the government had dispensed over US$100 million to farmers
(Rodriguez 2004:13). The government has used a number of
strategies to finance payments, including a national fuel tax,
international sales of carbon credits, payments from private
utilities and industry, and funding from the World Bank and
GEF (Rosa et al. 2003:16).
In Brazil, the government took a different approach in the
state of Acre, where it had set aside large extractive reserves for
indigenous rubber tappers. To preserve the economic viability of
the extractive reserves, it directly subsidized the rubber tapping
industry, with the subsidy amounting to an indirect PES program
to maintain the natural forest cover of the reserves. In Colombia,
the government is experimenting with a regulatory approach,
requiring hydroelectric utility companies to transfer a percentage
of their earnings to support good land management in upstream
communities, thus reducing reservoir siltation and preserving
water flows (Tognetti 2001:17).
The Challenges of Pro-Poor PES
Despite the theoretical potential for PES programs to benefit the
rural poor, many current programs present serious obstacles to
the inclusion of poor households. This reflects the fact that PES
programs were originally designed primarily to meet conservation
goals rather than support the livelihoods of the poor. The
Costa Rican program, for example, grew out of the Forestry
Department, and its structure favored larger and wealthier
landowners (Rosa et al. 2003:16-19). A survey in one Costa
Rican watershed found that while all of the large landholders
(owning more than 80 ha) were participating in the program,
only one third of small landholders (owning less than 10 ha) had
signed up (Miranda et al. 2003:21-22)
The obstacles to including the poor in PES programs mirror
many of the problems holding them back from other forms of
environmental income. The Costa Rican case, which has been one
of the most thoroughly studied, has faced several of these:
■ Tenure and formal titles. Secure property rights are one of
the foundations of a PES program. Land ownership is almost
always used to identify who should rightfully receive
payments. That leaves those without secure tenure—particularly
the landless—unable to benefit unless some special
provision is made, or unless benefits are distributed to larger
community associations that can then attempt an equitable
distribution. In Costa Rica’s original PES program, for
example, only titled land holders could participate, which
blocked many poor farmers. As PES programs mature and
the market for environmental services builds, this may
provide governments yet another incentive to improve tenure
security for the rural poor. In the interim, however, a growing
PES program could make things worse for the untenured
poor if it makes rural lands more attractive to—and more
liable to be snapped up by—large landowners.
■ Restrictions on land uses. PES guidelines may bar grazing
or other traditional forest uses that seem to conflict with the
environmental services that the program is paying for. Without
access to these or other replacement activities, poor families
will not be able to afford to participate in PES programs. Costa
Rica’s program did not allow farmers to graze cattle or
practice agroforestry on any lands enrolled in the program, yet
the PES payments were not sufficient to serve as a primary
income source. This left many small farmers no choice but to
opt out. In 2002 the government amended its program to
allow agroforestry activities (Rosa et al. 2003:20).
■ High transaction costs. The costs of applying for a PES
program, drawing up a contract, and monitoring performance
can become a considerable burden on poor families.
Applicants for the Costa Rican PES program have reported
spending large amounts of time and money obtaining and