Developing pro-poor markets for environmental services in the ...

5 Proposals for further research
The Philippine case studies presented and the review of existing initiatives for MES
development illustrate a certain dynamism that promises the achievement of conservation
objectives in that country. There is enough room in the existing legal and policy framework
for the creation and implementation of economic instruments. Institutional mechanisms
likewise exist, albeit at varying levels of efficiency. Yet much remains to be done for MES
development to create a significant impact on the Philippine environmental sector. The
following are recommendations for further work.
With respect to the IPAF, economic valuation studies need to be replicated in other parts of
the country. There are numerous protected areas listed on paper, but because of various
implementation problems such as lack of financial sustainability, some markets cannot seem
to take off. One case study that can be replicated is the imposition of watershed-protection
fees on a mineral water company benefiting from such protection, even if the company is
located outside the protected area. Furthermore, although most revenue-generating PAs have
only started to disburse their funds, early interventions – for example establishing a proper
monitoring system within the PAWB-DENR – can ensure that such funds are used for
programmes that can serve as payments to local communities for continuous provision of
environmental services. Finally, assistance can be provided in setting up some sort of a
‘payment scheme’ for local communities, particularly in areas where revenues have been
generated.
The Balian case study can also be extended so that assistance is provided in securing the
necessary rights over their water supply. Various forms of trading such rights can ensue,
which will necessitate a cost-benefit analysis of the various options open to the community.
Numerous lessons were learned from the Balian experience, which could be transferred to
other areas where community-based organisations are present. Such organisations need not be
currently active in watershed-protection efforts, but there should be an interest in pursuing
such objectives.
The implementation of the DOE Fund for Watershed Rehabilitation could be expedited and
designed to be more efficient. Intervention can be done on both levels – at the DOE and at
local level by providing advice and technical guidance on securing their share for
environmental-enhancement projects. Even areas that have had environmental enhancement
projects approved can be assisted in implementing their proposals.
Finally, for further development of markets in watershed protection, studies on raw water
pricing can be initiated. 59 Groundwater depletion must be addressed, one possibility being the
institution of a user-fee policy based on the depletion cost of groundwater, added to the cost
incurred by private well owners. This can contribute to groundwater conservation. In the
event that the reduction in the volume of groundwater extraction still exceeds sustainable
recharge rates, it will be necessary to determine and allocate the safe yield volume among
existing users. This in turn will call for the establishment of a system for monitoring and
metering groundwater use and the effective enforcement of a penalty system. To pave the
way for a market for groundwater rights, the extent of private rights within the public domain
will have to be redefined.
59 Proposal for raw water pricing contained in Bautista, G. and R. Tan (2001), Watersheds and Groundwater Depletion in the
Philippines: The Cagayan de Oro Experience. Institute of Philippine Culture, Ateneo de Manila University, Quezon City,
Philippines.
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