CPWF CIAT MINAM presentation at IFAD 11-09-13

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Marcela Quintero, gave this presentation to IFAD colleagues in Rome, in the context of sharing results from the 10 years of CPWF, CIAT and MINAM work on Payment for Ecosystem Services and Benefit Sharing Mechanisms, Sept. 11, 2013

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CPWF CIAT MINAM presentation at IFAD 11-09-13

  1. 1. Since 1967 / Science to cultivate change Marcela Quintero* (CIAT) Roger Loyola, Yolanda Puemape, (MINAM) * m.quintero@cgiar.org Designing PES in Peru: Putting research into use Photo by Neil Palmer. CIAT
  2. 2. Since 1967 / Science to cultivate change Payment for Ecosystem Services in watersheds in South America* • 14 cases identified in 2010 at different implementation stages • Most of them target activities that are assummed a priori to have positive impacts on ES • Or are oriented to maintain conserved areas (precautionary principle) * Quintero, M, ed. 2010. Servicios ambientales hidrológicos en la región andina. Estado del conocimiento, la acción y la política para asegurar su provisión mediante esquemas de pago por servicios ambientales. Lima, IEP; CONDESAN. (Agua y Sociedad, 12; Serie Panorama Andino, 1)
  3. 3. Since 1967 / Science to cultivate change Main motivations to promote PES in Latin America • Benefit sharing: To make a transfer of resources from ES beneficiaries to ES providers as a reward, for ES currently provided. – To tackle an uneven distribution of water-related ES benefits • Cost sharing: To make a transfer of resources to improve the provision of ES throughout the promotion of land use/management changes
  4. 4. Since 1967 / Science to cultivate change ES benefits redistribution within the society • Poverty incidence in Peru: 60% in the Andean region (22% in the pacific coast region) (INEI, 2007) • Most of the water use occurs in the pacific coast region (85%) and relies importantly from the supply of water from the Andean region Source: ANA, 2009. Política y estrategia nacional de los recursos hídricos en Peru.Lima. Perú.
  5. 5. Since 1967 / Science to cultivate change Canete river basin: Ecosystem Services vs Poverty Averaged per capita expenditures (peruvian soles) Water Yield
  6. 6. Since 1967 / Science to cultivate change 20102009 MINAM chooses Canete Basin as its pilot site for designing a PES Scheme. CIAT, CARE and WWF are invited to support this initiative. CIAT is asked to conduct respective hydrological and economic analyses . CIAT includes Canete as the Peruvian study site in a project supported by the CPWF CIAT conducted studies on economic valuation and hydrological priority areas as inputs for PES design TIMELINE Key fact: The Canete PES scheme is designated as the MINAM’s offical pilot case Key fact: The existence of an explicit interest or initiative to create a PES schemes was a precondition to select study sites for the project January Various meetings jointly organized between MINAM, CIAT and CARE with multiple local stakeholders to socialize and receive feedback on the PES initiative and research results. 2011 MINAM disseminated the PES initiative widely and kept supporting it even after two changes of Ministry and one change of government Consevation InternationaI joined the PES initiative supporting the legal analysis for implementing the scheme in Canete Key fact: Legal feasibility in one of the main gaps limiting the advance towards PES negotiation
  7. 7. Since 1967 / Science to cultivate change Upperbasin (4000-5800 Ecosystem service provision (Water yield (mm)) 1111-1507 Middlebasin (350–4000 51-256 Lowerbasin (0-350) 0-50 Peruvian case study, Canete River watershed – Current situation Upperbasin (4000-5800 River flow use (m3/s) 0 (mostly from springs) Middlebasin (350–4000 250, 64 Lowerbasin (0-350) Upperbasin (4000-5800 Water and land uses Extensive degrading grazing, subsistence agriculture Middlebasin (350–4000 Hydropower company Shrimp growers Lowerbasin (0-350) Urban dwellers Water inefficient commercial agriculture Tourists (rafting)
  8. 8. Since 1967 / Science to cultivate change Desired situation: REWARDING for ES Upperbasin (4000-5800 Middlebasin (350–4000 Lowerbasin (0-350) Transfer part of their benefits Investment in conservation alternatives Watershed’s socioeconomic asymmetries might be balanced by this benefit-sharing mechanism
  9. 9. Since 1967 / Science to cultivate change 20102009 MINAM chooses Canete Basin as its pilot site for designing a PES Scheme. CIAT, CARE and WWF are invited to support this initiative. CIAT is asked to conduct respective hydrological and economic analyses . CIAT includes Canete as the Peruvian study site in a project supported by the CPWF CIAT conducted studies on economic valuation and hydrological priority areas as inputs for PES design TIMELINE Key fact: The Canete PES scheme is designated as the MINAM’s offical pilot case Key fact: The existence of an explicit interest or initiative to create a PES schemes was a precondition to select study sites for the project January Various meetings jointly organized between MINAM, CIAT and CARE with multiple local stakeholders to socialize and receive feedback on the PES initiative and research results. 2011 MINAM disseminated the PES initiative widely and kept supporting it even after two changes of Ministry and one change of government Consevation InternationaI joined the PES initiative supporting the legal analysis for implementing the scheme in Canete Key fact: Legal feasibility in one of the main gaps limiting the advance towards PES negotiation
  10. 10. Since 1967 / Science to cultivate change PES concept transformation…from theory to practice • Since Wunder (2005) new PES definitions have emerged as a response to what is being happening on the ground • Current PES-type schemes in watersheds seems to be the result of collective action and cooperation rather than the action of market forces (supply vs. demand) (Quintero and Estrada, 2006) • “Transfer of resources between social actors, which aims to create incentives to align individual and/or collective land use decisions with the social interest in the management of natural resources”(Muradian et al., 2010)
  11. 11. Since 1967 / Science to cultivate change Requirements for the RES schemes design and implementation • Targeting actions: What and where? • Economic values of ES for the demand as a reference value to negotiate contributions to a ES Fund • Willingness to pay • Enabling the legal environment • Enabling institutional environment
  12. 12. Since 1967 / Science to cultivate change Research Highlights: Putting the pieces together for designing a PES Where payments should be targeted to? Identification of service providing areas using hydrological modeling What should be the payments amount to be made by ES beneficiaries? Estimation of economic value of watershed services for different ES users: Valuation of water-related ecosystem services* Type of downstream water user Value of the WES Current price of water Irrigated Agriculture (US$ m3) 0.29512 0.023664 Tourism (US$/ind) 15.75 n.a. Urban users Domestic (US$ mon-1) 3.5 3.1 - 15 Commercial (US$ mon-1) 5 6.3 - 44.4 These values are reference values to be used for anticipated negotiation processes. How payments should be used? Ecosystem conservation measures and social development projects.
  13. 13. Since 1967 / Science to cultivate change No 9% Si 91% Creation of a trust fund to provide rewards and incentives for conserving upper watershed ecosystems Quienes deberia ser los aportantes? - Pobladores 56% 16% 13% 8% 4% 2% 1% Agricultores Industria - Comercio Recaudación publica Hidroeléctrica M inería Camisea Turismo Who should contribute to the trust fund?
  14. 14. Since 1967 / Science to cultivate change 2011 Based on legal analysis recommendations, PES implementation actions incorporated in the action plan of the Natural Reserve (upstream area). Actors from multiple disciplines came together to be part of a ESS Law discussion group led by MINAM. CIAT/CPWF part of the invitees There is a final version of the Law to be subject of public consultation and congress approval 2012 TIMELINE (2) Key fact: Law discussion considered lessons learnt from practice including Canete regarding the conceptual approach, institutional bottle necks, legal constraints, etc. Key fact: CIAT is invited by IFAD and MINAM to be part of the project formulation mission. Technical-science- based project results are taken in to account in this. IFAD approached MINAM with the purpose of supporting the creation of a Trust Fund to start up the operation of the PES scheme in Canete. A GEF- IFAD project was formulated (pending for approval)
  15. 15. Since 1967 / Science to cultivate change Legal and institutional bottlenecks for implementing PES in watersheds - Peru 0 2 4 6 8 10 12 14 16 18 20 Santa Alto Mayo Rumiyacu, Mishiyacu y Almendra Gera Cumbaza Quiroz San Alberto-La Colina Nanay Rimac Cañete Ica-Huancavelica Piuray Quanda y Botijas Jequetepeque Cachi Chili Tilacancha PRELIMINAR DIAGNOSTICO DISEÑO NEGOCIACION IMPLEMENTACION Quintero, M., Pareja, P., Rivera, G. 2013 (Forthcoming).
  16. 16. Since 1967 / Science to cultivate change Legal bottlenecks 0.00 10.00 20.00 30.00 40.00 50.00 60.00 Porcentaje(%) Sectores priorizados • Inability to transfer voluntary contribution from urban water users to an indenpendent Fund for PES • How to channel public resources of local governments into PES funds? • How to ensure sustainability of the fund –voluntary vs mandatory?
  17. 17. Since 1967 / Science to cultivate change Legal and institutional bottlenecks • Financial independence • Lack of trust on current organizations • Lack of guidelines on how to establish new institutions for operating RES (rules and organizations) Quien debería ser el administrador del fondo - pobladores EMAPA - Cañete 24% Municipalidad 9% Crear Nueva 66% Otra existente 1% Who should manage the ES trust fund?
  18. 18. Since 1967 / Science to cultivate change RES implementation requires multisectoral coordination for operating • There is a lack of an institutional structure for an integrated watershed management • National policy on water resources proposed the creation of watershed councils, however the process of creation is incipient and lack a specific funding for its functioning • How to articulate RES into future watershed councils? intersectorial coordination and need for official guidelines SERNANP: National Service of Protected Areas Local water authority / National water authority
  19. 19. Since 1967 / Science to cultivate change Overcoming bottlenecks for RES implementation Proposed law • Offical recognition of RES, eventhough are voluntary • Definition of RES: Rewards and incentives • Avoid perverse incentives • Enable transfer of urban water users contributions into RES funds • Highlights the importance of articulating PES with existing land and water use/management plans Remaining gaps • How to become voluntary contributions in a legally binding to ensure continuity • Management design that guarantees independency and transparency Canete institutional arrangement for implementation • Creation of ad-hod watershed committee for PES governance transition towards watershed councils • National organization that currently manages conservation project will manage the PES Fund • High replicability potential
  20. 20. Since 1967 / Science to cultivate change Final remarks • One such recurrent issue is community dissatisfaction (to varying degrees) about the uneven distribution of water-related ES benefits • In this sense, claiming a transfer of resources from ES beneficiaries is based in the current delivery status of ES and not necessarily in a need to modify an negative environmental externality (rewards vs. compensation) • This imposes changes in conceptual and methodological approach • This is more an institutional innovation than a market-based solution in the management of common goods in watersheds (ie.ES) • Institutional and legal bottlenecks become crucial for enabling RES implementation • IFAD – CIAT/CPWF collaboration: A good example of R&D alliance…putting research into use!

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