By Pablo Gutman WWF MPO

1
What Are PES? Opportunities and Obstacles to
Implement Pro-Poor PES Projects

• By Pablo Gutman / WWF MPO
• A Presentation at a Meeting organized by f the
• Africa Biodiversity Collaboration Group, on
• Payments for Environmental Services and Poverty
  Reduction, at
• WRI, Washington D.C.
• December 15, 2005

2
What Are Payments For Ecosystem Services (PES)?

• PES is the generic name of a variety of
  arrangements through which the beneficiaries of
  ecosystem services pay back to the providers of
  those services.
• The PES concept can be thought as the complement
  (or the opposite?) to the Polluter Pays
  Principle.
• In any specific PES scheme there are at least
  three major issues (a) the ES (b) the payment
  arrangements and (c) what is driving the whole
  PES scheme

3
What Are Ecosystem Services And Where Do They
Come From?

• Ecosystem services are whatever nature provides
  that is valuable for humankind but notice that
• There are differences between ecosystem functions
  and ecosystem services (we should avoid double
  counting and over assessing).
• There are differences between services and goods
  (that at times are difficult to make)
• There are differences between services provided
  by nature on its own, and through human husbandry
  (important to decide what are you paying for).

4
The Millennium Ecosystem Assessment View of ES
5
Ecosystem Services May Be Present At Any Scale

• Local For example water quality benefits of
  conservation in a small watershed.
• National. For example country-wide benefits of
  biodiversity conservation.
• International. For example global commons
  benefits of conserving of biodiversity,
  international waters or the atmosphere.

6
Payment Arrangements May Vary a Lot

• They may entail a market that brings together
  willing buyers and willing sellers.
• Or a private or public entity may pull together
  the demand. E.g. a private utility or a river
  basin authority may collect fees and use those
  revenues to pay providers of ES.
• It can be a government-driven system where public
  revenues (earmarked or not) are used to pay the
  providers of ecosystem services.
• Or it can be an international scheme where
  international or regional funds are used to pay
  for the provision of global commons.

7
What is Driving the Whole PES Scheme 1
8
What is Driving the Whole PES Scheme 2
9
Current PES Experiences

• If we accept a broad definition of PES there
  are many PES schemes operating around the world,
  
• Large PES schemes tend to be government driven
  (e.g., Australia, Brazil, China, EU, Colombia,
  Costa Rica)
• Most private market- type PES are of local scale
  (e.g. Africa conservancies, LAC watershed
  protection schemes) they tend to be small (but
  look to New York water company experience)
• The enforcement of the Climate Change Convention
  may change this picture fostering a large private
  market for carbon sequestration services.

10
What Have We Learnt From Current PES Experiences?

• Most market-type PES have been of small scale,
  hence a marginal source both of ecosystem
  services to users and of income to providers
• Government sponsored PES schemes tend to be
  larger, but critics point to little conservation
  gains, high costs and poor social targeting.
• From a conservation point of view the PES
  unbundling approach risks loosing stage for the
  less marketable ES, or pitching one ES against
  another.
• From a social point of view it raises issues of
  equity and access to basic services, and
  actually PES approaches face a lot of resistance
  in many developing countries

11
Could there be Pro-Poor PES?

• OPPORTUNTIES
• The world needs a new urban-rural compact
• The map of rural poverty overlaps with the map of
  rural biodiversity
• In many cases the poor are actually the de facto
  stewards of the environment
• In many cases nature is the poors m ain asset

• OBSTACLES
• Fears that the poor will lose more as buyers than
  they may gain as sellers
• Conservation is usually nature-intensive, seldom
  labor-intensive
• The poor may lack the property rights, know- how
  and capital
• High transaction costs
• Non-supportive regulations

12
Is a PES Appropriate for your Rural Conservation
and Development Project? 1

• It may be, but you will need to carefully think
  it through, considering PES not in isolation, but
  as part of a broader sustainable financing
  strategy. And here is a checklist to help you
  decide about it
• Can you clearly state what are both the social
  and conservation goals for the area in question?
• Achieving these objectives requires promoting
  significant natural resources use changes among
  farmers and other rural dwellers?
• Is there is a clear relation between the
  conservation goals and some ecosystem services
  that are valuable to would-be payers, or at least
  to a relevant sector of society?

13
Is a PES Appropriate for your Rural Conservation
and Development Project? 2

• Are you going after payers that actually can pay,
  and may be motivated to pay?
• Have you a good idea of how the moneys collected
  will be used?
• Have you a good idea of how the rural poor would
  participate and benefit of such PES scheme?
• Are there already in place regulatory and
  institutional frameworks that may facilitate the
  adoption of a PES scheme and the participation of
  the rural poor?.

14
Is a PES Appropriate for your Rural Conservation
and Development Project? 3

• You always need a good answer to question 1
• If answers to questions 2 through 8 are mostly
  yes you may have a PES winner at hand.
• If answers to questions 2 through 8 are mostly
  negative, better look for other financing
  schemes.
• If some are yes and some are no, it may be useful
  to dig a little deeper before deciding if a PES
  scheme is the way to go for your rural
  conservation and development project.

15
Where to Learn More and Look for WWF PES-Related
Activities?

• To learn more about PES, these sites provide
  valuable references and information www.iied.org
  www.forest-trends.org www.cifor.cigiar.org
  www.worldbank.org www.panda.org/mpo
  www.flowsonline.net
• For updates on WWF PES-related activities
  subscribe to PES InfoExchange (email
  sara.davidson_at_wwfus.org ) or contact your
  regional WWF-PES anchor office (DCPO in Europe)