Scope of Payment for Ecosystem Services Mechanism for ... - icimod

attempt to formally define PES and clarify the concept, Wunder (2005) proposed a set offive basic principles:A PES scheme is:1. A voluntary transaction where2. A well-defined environmental service (or a land use likely to secure that service)3. Is being “bought” by at least one buyer4. From a (minimum of one) environmental service provider5. If, and only if, the environmental service provider secures environmental serviceprovision (conditionality)For a payment scheme to succeed and endure, the actions and change brought byupstream land and water managers should result in identifiable benefits for downstreamwater users. Therefore, clear cause-and-effect relationships between upstream land andwater use practices and the provision of watershed services for downstream users needs tobe identified. The degree to which this is possible varies considerably from case to case.Negotiations among buyers and sellers of watershed services can take many years. Tocomplete these negotiations successfully, facilitators and stakeholders have to develop ashared understanding of the diverse interests, assets, capacities and power of the players.The aim should be the formation of an agreement that specifies the design and rules foroperating a payment scheme that is effective, efficient, enforceable, transparent, equitableand sustainable (Smith et al. 2006).Noordwijk et al. (2007) proposed four criteria for an effective PES mechanism(Table 2.2)under two broad components- efficiency and equity.Table 2.2: Four dimensions and 12 sub- criteria for compensation and reward mechanismfor ecosystem services.Stage Criteria Sub-criteriaA. Effectiveness,Efficiency andSustainabilitya. Realistic Scoping Effectivelymitigates,reduces oravoidsthreats toES for allpartiesinvolved101. A broadly shared perception ofcause–effect relation links threatsto ES, to potential activities toreduce or avoid these threats byidentifiable actors at a relevanttemporal and spatial scale2. The value to ES-beneficiaries ofreduction or avoidance of the