EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES  :  EXPERIENCES FROM PRO-POOR REWARDS FOR ENVIRONMENTAL  SERVICES IN...
PRESA Sites
<ul><li>Concepts </li></ul><ul><li>Environmental services  </li></ul><ul><li>Biophysical outcomes of proper management of ...
Redirecting development pathways towards environmental integrity Positive incentives are needed to reward rural poor for t...
PRESA SO FAR: Can watersheds be managed sustainably through negotiated agreements between landowners and potential benefic...
REALISTIC <ul><li>RES schemes based on  scientifically sound  assessment of relationships of land use changes and ES provi...
Impacts of land use change - Kapingazi The impact of land use change on water yield is generally low.  Scenario Water yiel...
Effectiveness of landuse practices on hydrology Quantity:  Soil and water conservation practices have little effect on wat...
Towards a business case for PWS - Sasumua <ul><li>Grassed waterway (3m width by 20 km length - approx 15 acres)  </li></ul...
Pay-back period based on constant cost of allum alone
Increasing value accruing to farmers <ul><li>Alternative payment mechanisms -  Ulugurus </li></ul><ul><li>Co-investment pr...
Sediment sources in Sasumua <ul><li>Low erosion rates from the forest </li></ul><ul><li>High rates on some agricultural ar...
VOLUNTARY <ul><li>Both ES providers and beneficiaries in a  negotiated scheme  through  free choice at the individual leve...
Are sellers willing to accept payments for ES supply? <ul><li>Farmers willing to accept (WTA) payments for: </li></ul><ul>...
<ul><li>Nairobi water users - 2 o  beneficiaries </li></ul><ul><li>Willing to pay higher water tariffs  </li></ul><ul><li>...
CONDITIONALITY <ul><li>Performance-based rewards </li></ul>
If performance will not happen without incentives  <ul><li>PROVIDERS </li></ul><ul><li>1. Performance is driven by –  </li...
PES Paradigms Conditionality <ul><li>CES:  C ommoditized  E nvironmental  S ervices </li></ul><ul><li>Direct  interaction ...
WHAT IS THE RIGHT MECHANISM? van Noordwijk and Leimona (2010) <ul><li>A strict interpretation of commoditized ES can be pr...
Free and prior informed consent Efficiency  Fairness Balancing act  is needed
 
<ul><li>Sellers :  </li></ul><ul><li>Communities </li></ul><ul><li>Governments </li></ul><ul><li>Industry </li></ul><ul><l...
 
Initial interest Effective increase in ES Signed contract External investors and regulators: learning curve Learning curve...
WHERE TO WITH PES? <ul><li>Continuing to generate evidence to better engage multiple actors </li></ul><ul><li>2.  Relating...
Thank You Sara Namirembe ( [email_address] ) PRESA  World Agroforestry Centre http://www.worldagroforestrycentre.org/sea/N...
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EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES : EXPERIENCES FROM PRO-POOR REWARDS FOR ENVIRONMENTAL SERVICES IN AFRICA ( PRESA )

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  • In a landscape, the community deals with three other main groups in five major ways (see arrows in Fig. 2): Private sector entities who buy marketable commodities for further processing and trade and/or use the landscape resources for added value (e.g. through hydropower or the sale of drinking water), Governments imposing rules on the private sector and their interaction with ES Government agencies, sometimes acting to represent international conventions, regulating what the community is allowed to do, how it has to organize its administration and how it can be part of development processes prioritized at higher levels, Consumers who buy local goods and may be interested in supporting ES as well, Consumers elsewhere in the world who opt for competitively priced goods, but also have concerns about the status of poverty indicators, natural resources and human rights in the area
  • In a landscape, the community deals with three other main groups in five major ways (see arrows in Fig. 2): Private sector entities who buy marketable commodities for further processing and trade and/or use the landscape resources for added value (e.g. through hydropower or the sale of drinking water), Governments imposing rules on the private sector and their interaction with ES Government agencies, sometimes acting to represent international conventions, regulating what the community is allowed to do, how it has to organize its administration and how it can be part of development processes prioritized at higher levels, Consumers who buy local goods and may be interested in supporting ES as well, Consumers elsewhere in the world who opt for competitively priced goods, but also have concerns about the status of poverty indicators, natural resources and human rights in the area
  • EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES : EXPERIENCES FROM PRO-POOR REWARDS FOR ENVIRONMENTAL SERVICES IN AFRICA ( PRESA )

    1. 1. EXAMINING PAYMENTS/REWARDS FOR ENVIRONMENTAL SERVICES : EXPERIENCES FROM PRO-POOR REWARDS FOR ENVIRONMENTAL SERVICES IN AFRICA ( PRESA ) Sara Namirembe With Meine van Noordwijk Delia Catacutan Leimona Beria
    2. 2. PRESA Sites
    3. 3. <ul><li>Concepts </li></ul><ul><li>Environmental services </li></ul><ul><li>Biophysical outcomes of proper management of natural resources </li></ul><ul><li>Have considerable impact on human beings and wide natural processes. </li></ul><ul><li>PES (payments or rewards for environmental services) - harnessing market forces to increase positive environmental outcomes. </li></ul>
    4. 4. Redirecting development pathways towards environmental integrity Positive incentives are needed to reward rural poor for the envirponmental services they can/do provide
    5. 5. PRESA SO FAR: Can watersheds be managed sustainably through negotiated agreements between landowners and potential beneficiaries? <ul><li>RES mechanisms differ from ‘command & control’ </li></ul><ul><li>Conditional : a “performance” basis for the rewards /payments as opposed to entitlement </li></ul><ul><li>Voluntary : engagement of both ES providers and beneficiaries in a negotiated scheme through free choice at the individual level </li></ul>Key aspects of RES <ul><ul><li>Realistic : RES schemes based on scientifically sound assessment of relationships of land use changes and ES provision. Feasible </li></ul></ul><ul><ul><li>Pro-poor: RES schemes must consider multiple dimensions of poverty </li></ul></ul>Context Mechanism +
    6. 6. REALISTIC <ul><li>RES schemes based on scientifically sound assessment of relationships of land use changes and ES provision. </li></ul><ul><li>Feasible </li></ul><ul><li>Propoor </li></ul>
    7. 7. Impacts of land use change - Kapingazi The impact of land use change on water yield is generally low. Scenario Water yield (mm) Surface runoff % Base flow % Base case 846 86 14 Convert tea farms to annual crops 936 84 16 Convert coffee farms to annual crops 864 88 12 Double built up areas 860 86 14
    8. 8. Effectiveness of landuse practices on hydrology Quantity: Soil and water conservation practices have little effect on water yield Quality: Significant effect on sediment yield Sasumua Landuse practices Sediment yield reduction (%) Reduction in surface runoff (%) Increase in base flow (%) Contour farming with trees 49 16 8 Grass filter strips 38 - - Grass waterway 41 - - Terraces 85 22 10
    9. 9. Towards a business case for PWS - Sasumua <ul><li>Grassed waterway (3m width by 20 km length - approx 15 acres) </li></ul>Benefit to Nairobi City Water and Sewerage Cooperation Reduction in cost of alum: Reduction in costs of desiltation of dam <ul><li>Cost to 500 households </li></ul><ul><li>Year 1 : </li></ul><ul><ul><li>Land Annual lease </li></ul></ul><ul><ul><li>Labour and grass </li></ul></ul><ul><li>Year 2 onwards: </li></ul>Net annual earning per household: 1,725,000 283,200 (Values in Kenya Shillings) 20% less sediment yield into Sasumua dam 566.4 400,000
    10. 10. Pay-back period based on constant cost of allum alone
    11. 11. Increasing value accruing to farmers <ul><li>Alternative payment mechanisms - Ulugurus </li></ul><ul><li>Co-investment preferred - village infrastructure </li></ul><ul><li>Group payments – not likely to be successful </li></ul><ul><li>Exploiting other income flows from sustainable watershed management: </li></ul><ul><li>Carbon : </li></ul><ul><li>Albertine Rift: in River Mubuku watershed </li></ul><ul><li>Usambaras : REDD feasibility in Sigi River watershed </li></ul><ul><li>Eco-certification </li></ul><ul><li>Albertine Rift of crafts and honey </li></ul><ul><li>Biodiversity : </li></ul><ul><li>Fouta Djallon </li></ul>Ulugurus Mts, Tanzania
    12. 12. Sediment sources in Sasumua <ul><li>Low erosion rates from the forest </li></ul><ul><li>High rates on some agricultural areas, exceeding 11.2 tons/ha per year </li></ul>Reducing costs: targeting hotspots
    13. 13. VOLUNTARY <ul><li>Both ES providers and beneficiaries in a negotiated scheme through free choice at the individual level </li></ul>
    14. 14. Are sellers willing to accept payments for ES supply? <ul><li>Farmers willing to accept (WTA) payments for: </li></ul><ul><li>Adopting agroforestry and other soil and water conservation actions </li></ul><ul><li>enhancing water quality </li></ul>BUT may underestimate opportunity costs $93/ha/y compared to model estimate of $232/ha/y ( Kapingazi) <ul><li>IF ( Ulugurus ): </li></ul><ul><li>Not located in the main villages/towns </li></ul><ul><li>They own sufficient assets - livestock </li></ul>
    15. 15. <ul><li>Nairobi water users - 2 o beneficiaries </li></ul><ul><li>Willing to pay higher water tariffs </li></ul><ul><li>Interested in increased and regular flow </li></ul>Are buyers willing to pay for ES? <ul><li>Nairobi Water and Sewerage Cooperation - 1 o beneficiary </li></ul><ul><li>Burdened with multiple levies: </li></ul><ul><li>Water Act demands abstraction fee of 50cts/m 3 (Approx KS 1m/month) to WRMA for watershed mgt. </li></ul><ul><li>Not authorised to increase water tariffs </li></ul><ul><li>Governance - Inadequate management </li></ul>
    16. 16. CONDITIONALITY <ul><li>Performance-based rewards </li></ul>
    17. 17. If performance will not happen without incentives <ul><li>PROVIDERS </li></ul><ul><li>1. Performance is driven by – </li></ul><ul><ul><li>Perceived value of interventions at household level </li></ul></ul><ul><ul><li>Perceived value of capacity gained </li></ul></ul><ul><ul><li>NOT recurrent payments </li></ul></ul><ul><li>Ulugurus : Prototype payments, one year </li></ul><ul><li>Upper Tana: UTZ coffee certification, 9 years </li></ul><ul><li>Risk of a crowding-out effect - Usambaras </li></ul>BENEFICIARIES Short run: payments for effort based on trust – CSR Long run: rigorous proof needed Western Usambaras, Tanzania
    18. 18. PES Paradigms Conditionality <ul><li>CES: C ommoditized E nvironmental S ervices </li></ul><ul><li>Direct interaction of ES providers & beneficiaries </li></ul><ul><li>Recurrent monetary payments based on supply and demand </li></ul><ul><li>No explicit poverty target </li></ul><ul><li>Actual ES delivery & direct marketability </li></ul><ul><li>COS: C ompensating for O pportunities S kipped </li></ul><ul><li>Paying for accepting restrictions </li></ul><ul><li>Achievement of a condition or effort </li></ul><ul><li>Poverty target added with certain conditions </li></ul><ul><li>CIS: C o- I nvestment in (landscape) S tewardship </li></ul><ul><li>Entrusting resource management to local </li></ul><ul><li>Full trust of management plan & local monitoring with high social capital </li></ul><ul><li>flexible contract , broad sanctions </li></ul>van Noordwijk and Leimona (2010) Proxies, recurrent Plans investment 'Real' ES, recurrent
    19. 19. WHAT IS THE RIGHT MECHANISM? van Noordwijk and Leimona (2010) <ul><li>A strict interpretation of commoditized ES can be problematic. </li></ul><ul><li>Monetary incentives may be counterproductive </li></ul><ul><ul><li>undermine existing norms </li></ul></ul><ul><ul><li>not sufficient and/or durable enough </li></ul></ul><ul><li>“ Co-investment” in stead of “payment” appeals to both social and financial concepts. </li></ul>CO-INVESTMENT AND SHARED RESPONSIBILITY ENTAIL <ul><ul><li>respect </li></ul></ul><ul><ul><li>mutual accountability </li></ul></ul><ul><ul><li>commitment to sustainable development </li></ul></ul><ul><ul><li>social exchange rather than financial transactions. </li></ul></ul>
    20. 20. Free and prior informed consent Efficiency Fairness Balancing act is needed
    21. 22. <ul><li>Sellers : </li></ul><ul><li>Communities </li></ul><ul><li>Governments </li></ul><ul><li>Industry </li></ul><ul><li>Large-scale investors </li></ul>Buyers : Local & international companies Banks Governments Individuals Intermediaries : Regulators Brokers Project developers e.g., NGOs Researchers
    22. 24. Initial interest Effective increase in ES Signed contract External investors and regulators: learning curve Learning curve for local stakeholders (actors) of land use change Smooth implemen- tation? Efficient + Fair reward systems require a two-way learning curve Negotiations
    23. 25. WHERE TO WITH PES? <ul><li>Continuing to generate evidence to better engage multiple actors </li></ul><ul><li>2. Relating to financial mechanisms at national scale. Examining </li></ul><ul><ul><li>context where CES-COS-CIS apply </li></ul></ul><ul><ul><li>effectiveness/viability of private sector market-driven versus fund approach </li></ul></ul><ul><ul><li>the business case for publically funded PES </li></ul></ul><ul><li>3. Examining aspects of scale and thresholds for ES supply </li></ul><ul><li>4. Contributing to the carbon agenda: stocks and fluxes, leakage, adaptation, co-benefits </li></ul><ul><li>5. Linking P/RES into food security and broader ICRAF programs such as: </li></ul><ul><ul><li>Evergreen Agriculture including grasslands/Drylands </li></ul></ul><ul><ul><li>Millennium Development Goals </li></ul></ul>
    24. 26. Thank You Sara Namirembe ( [email_address] ) PRESA World Agroforestry Centre http://www.worldagroforestrycentre.org/sea/Networks/RUPES http://presa.worldagroforestry.org
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