This document discusses balancing fairness and efficiency in payments for environmental services (PES). It outlines 6 options for dealing with negative effects of declining ecosystem services: 1) moving elsewhere, 2) regulating land use, 3) engineering solutions, 4) PES, 5) boycotts, and 6) linking institutions and identities. PES is analyzed in more depth, noting its complexity involving buyers, sellers, intermediaries, and metrics to measure environmental services and fairness vs efficiency. Three PES paradigms are identified: commodification of services, compensation, and co-investment. Feedback loops are shown linking land use and consequences through actors, institutions and drivers like policies and incentives. Fairness and efficiency are discussed across scales, noting
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Equity workshop: Balancing equity and efficiency in Payments for Ecosystem Services (PES)
1. Balancing equity and
efficiency in PES
Expert Workshop on Equity, Justice and Well-being in Eco-
system Governance; March 26/27th, 2015; IIED, London
Meine van Noordwijk, Beria
Efficient FairEfficient Fairly efficient Efficiently fair Fair
Meine van Noordwijk, Beria
Leimona, Sara Namirembe,
Peter Minang
3. Monetaryfungibility
Fairness/efficiency: 5 scales of economics
Individual & household decisions
on scarce resources
Behavioural economics: really
internalizing externalities at
emotional core of decision making
Annu. Rev. Environ. Resour. 37, 389-420
$$ don’t
buy real
happiness
Monetaryfungibility
on scarce resources
National scale decisions on
scarce resources
Environmental economics: inter-
nalizing externalities of individual
decisions for common goods
Ecological economics:
planetary boundaries put
hard constraints
$$ don’t
get us a
new planet
4. Payments for Environmental Services: Evolution Toward
Efficient and Fair Incentives for Multifunctional Landscapes
5.
6.
7.
8.
9.
10.
11.
12. DIVERGENT model
of Territorial
configuration
Cheap massive,
profitable urban
housing
Low-cost, low-
quality food
provisioning
Control of Water
excess and
scarcity
Elite
suburban
residence
Rural-urban
migrants
UrLand
Quality
Segregate vs Integrate at
societal level
Luis García-Barrios et. al.
2009. Bioscience and 2010
La Jornada del Campo.
Fortress type
conservation
against masses
Rural
poor
Cheap massive,
profitable)
industrial
agribussinessElite orga-
nic food
Wage
laborers
Elite
ecotourism
Control of erosion & Water
excess and scarcity
Eco-
servants Off-farm
suppliers
AgLandNatLand
Quality
Rural-Urban (Desa-
Kota) Matrix Land-
scapes and
Livelihoods
13. Income
Entreprise
Social relations
ID
Identity, self-
realization
Marketable
goods & services
People are complex entities…
Their decisions are influenced by
many aspects of a ‘well-being’ or
Maslow pyramid, representing
Physical security, shelter
Food & water security
Health
Income
many aspects of a ‘well-being’ or
Maslow pyramid, representing
their ‘basic needs’, their social
relations within evolving local
institutions, and human capital.
14. Income
Entreprise
Social relations
ID SDG4 (Continuous learning), SDG5 (Gender, social inclusion)
SDG8 (Employment, decent jobs)
SDG810 (Less inequality),SDG16 (Accountability),SDG17 (Partnership)
SDG1 (End poverty)
The 17 Sustainable Development Goals (SDG’s) address
all levels of a ‘human well-being’ or Maslow pyramid*
Physical security, shelter
Food & water security
Health
Income SDG1 (End poverty)
SDG3 (Health), SDG12 (consumption), SDG15(conservation)
SDG2 (Food), SDG6 (Water), SDG7(Energy), SDG14 (Oceans)
SDG9 (Infrastructure), SDG11 (Cities), SDG13 (Climate change)
* The specific formulation of many SDG’s makes clear that they typically
involve more than one level, e.g. Gender includes physical security
15. Income
Entreprise
Social relations
ID
Identity, self-
realization
Human
Socialcapital
Financialcapital
Physical security, shelter
Food & water security
Health
Income Human
capital
Socialcapital
Natural
capital
Financialcapital
Built-up
capital
The ‘well-being’ or Maslow pyramid relates to all of the 5 asset (capi-
tal) types of the ‘livelihood analysis’. It can help us understand the
multiple dimensions of ‘poverty’. Financial capital (and lack of
income definitions of poverty) focus on middle of the diagram.
16. Marketable
goods & services
People
(land users)
Land is used by people to
satisfy their own needs within
emerging local institutions,
but once they find externalbut once they find external
markets for products and
services, this feeds back to
their land use decisions
17. Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
People elsewhere
including neigh-
bours and ‘tele-
connections’
Income
Entreprise
Social relations
ID
Identity, self-
realization
*landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
Externality of decision making
Land use, however,
has environmental
effects that affect the
land users directly,
but also impact on
people elsewhere
Physical security, shelter
Food & water security
Health
Income
18. SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Ecosystem services*
People elsewhere
including neigh-
bours and ‘tele-Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
* Environmental Services (ES) equals ecosystem services (ES*) minus market-based provisioning
bours and ‘tele-
connections’
The terminology of ecosystem and environmental services reflect
these impacts on others, as externalities of LU decision making
Externality of decision making
Physical security, shelter
Food & water security
Health
Income
19. SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Ecosystem services*
Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
* Environmental Services (ES) equals ecosystem services (ES*) minus market-based provisioning
The various ES affect people at all levels of their well-being pyramid.
To deal with negative effects of declining ES, they have 6 options:
Externality of decision making’
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
20. Option 1: move to a clean place elsewhere
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioningHuman history is full of shifting loci of culture, but now there’s
nowhere left to go; global impacts affect any place on this planet
Externality of decision making’
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
21. Option 2: forbid pollution, regulate land use
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioningThis option depends on power relation and may require strong
enforcement; it breaks down under more democratic governance
Externality of decision making’
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
22. Option 3: engineer to reduce ES dependence
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
Engineering
Engineering can help with e.g. water and water-related issues
(floods, landslides), but tends to be high-cost and rigid (sunk costs)
Externality of decision making’
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
23. Option 4: payments for environmental services
Marketable
goods & services
People
(land users)
ES
metric
Marketable
goods & services
Influence &
lateral flows
People else-
where including
neighbours and
‘teleconnections’
Income Income
PES (payment for environmental services)
Buyers
Sellers
metricIncome Income
PES emerged as a ‘simple’ solution to financially intenalize externalities
24. Option 5: boycott products without certification
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
* Environmental Services (ES) equals ecosystem services (ES*) minus market-based provisioning
Boycotts help to increase awareness and can lead to ‘ecocertification’
as response, but this may have high transaction costs for all
Externality of decision making’
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
25. Option 6: Link the institutions and identities
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
* Environmental Services (ES) equals ecosystem services (ES*) minus market-based provisioning
Creating a shared sense of identity, moral standards of acceptable
behaviours can internalize externalities of LU decisionmaking
Externality of decision making’
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
26. Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Ecosystem services*
ES
metric
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
Income
But, the PES reality is more complex…
SupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
Engineering
* Environmental Services (ES) equals ecosystem services (ES*) minus market-based provisioning
PES (payment for environmental services)
Buyers
‘Sellers’
Intermediaries
metric
Externality of decision making
27. Income
Entreprise
Social relations
ID
Identity, self-
realization
Income
Entreprise
Social relations
ID
Identity, self-
realization
SupportingEvolutionary
Marketable
goods & services
Influence &
lateral flows
Climate
Water
Geomorphology
*erosion/sedi-
mentation
*landslides
RegulatoryCulturalProvisioning
Fairnessperception
Efficiency
Physical security, shelter
Food & water security
Health
Income
Physical security, shelter
Food & water security
Health
IncomeSupportingEvolutionary *landslides
Nutrients
Fire
Vegetation & flora
Fauna
Biogeography
RegulatoryCulturalProvisioning
Engineering
* Environmental Services (ES) equals ecosystem services (ES*) minus market-based provisioning
Fairnessperception
Efficiency
Green
accounting
Fairness & efficiency
Externality of decision making
Access, LU regulation
Payments, rewards, incentives, tax
Respect, recognition, suasion
Natural capital and
ES monitoring
28. Three PES-related
paradigms
• Commodification of
environmental services
A. packages of ES become
tradable commodities,
B. ecocertification of existingB. ecocertification of existing
commodities;
• Compensation for foregone
ES-unfriendly but legal
opportunities;
• Coinvestment in environ-
mental stewardship.
29. Drivers
A2. LU rights (e.g. community forest mngmnt)
Response/
feedback
Actors/
agents
Land
use/cover
Conse-
quences &
Livelihoods, provisioning &
profitability
A1. Land use policies, spatial development planning, roads
GG
G
Institutions,
identity,
pride
Drivers
B1. Incentive structure through policy change (tax, subsidy etc)
B2. PES and conditional ES incentives
feedback
options
Biodiversity, Watershed
functions, GHG emissions,
Landscape beauty
agents
use/cover
changes
quences &
functions
Modified from: Van Noordwijk, M., B. Lusiana, G. Villamor, H. Purnomo, and S. Dewi. 2011. Feedback loops added
to four conceptual models linking land change with driving forces and actors. Ecology and Society 16(1): r1.
[online] URL: http://www.ecologyandsociety.org/vol16/iss1/resp1/
C. Suasion and institutional support
G G
G = Potential gender specificity of analysis & targeting of interventions
30. Fairness vs Efficiency
Giga-fairness vs Giga-efficiency
Macro-fairness vs Macro-efficiency
Meso-fairness vs Meso-efficiency
Both Fairness & Efficiency reach and connect across scales
Tradeoff only in short term
Procedural fairness may seem inefficient, but it isn’t //
legitimacy is key to success
Meso-fairness vs Meso-efficiency
Micro-fairness vs Micro-efficiency
Pico-fairness vs Pico-efficiency