Payment for Ecosystem Services (PES) as a means of sharing environmental benefits: How numbers provide the basis for dialogue in water-based payment schemes in the Andes Andy Jarvis, Marcela Quintero, Nathalia Uribe, Ruben-Dario Estrada, Jorge Rubiano
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Andy Jarvis - Payment For Ecosystem Services (Pes) And Numbers For Negotiation Cocoon Sept 2009
Presentation made by Andy Jarvis from the Decision and Policy Analysis Program of the International Centre for Tropical Agriculture (CIAT). Delivered at the COCOON meeting in CIAT, Colombia in September 2009.
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Payment for Ecosystem Services (PES) as a means of sharing environmental benefits: How numbers provide the basis for dialogue in water-based
payment schemes in the Andes
Andy Jarvis, Marcela Quintero, Nathalia Uribe, Ruben-Dario Estrada, Jorge Rubiano
Contents
• The importance of information
• Our principles• Three examples of science-
based establishment of water-based PES in the Andes– Chingaza– Moyobamba– Fuquene
• Outlook
CIAT’s work on Ecosystem services
• Very focussed on externalities• ES that have a national, regional or international
market– Aboveground carbon– Water
• Putting the numbers on ES flows in an integrated manner
• Learning from broad range of cases• Enabling the poor to engage and benefit from
emerging ES market opportunities
Reasons for Failures in PES
• High failure rate of PES, though Latin America has been a test-bed
• Unreal expectations for PES• Lack of equity in benefit sharing• Poor or inappropriate governance
structures• Low perceived impact in terms of ES
benefits• High potential to create conflict,
rather than resolve itNumbers as a basis for dialogue
Externalities• An externality is the beneficial
or damaging effect caused on a third party by the decision of other(s)
• Those who cause the effect do not receive any compensation for the generated benefit, or do not assume the cost of the damaging effect
• Environmental externality is determined by the environmental effects of a human activity
• When the effect is positive the externality is considered as an environmental service
Example: Watershed services: regulation of streamflows and retention of sediments achieved by land uses and management
Poverty and Extreme Poverty in rural zones (Percentage of total rural population)
0
10
20
30
40
50
60
70
Poverty % 59.9 65.4 45.1 63 53.7
Extreme poverty % 32.7 40.4 40.8 37.6 38.3
1980 1990 1994 1997 1999
Source CEPAL: Panorama Social de América Latina, 2000-2001.
Extreme poverty is as bad or worse than 25 year ago
PES that promote natural, economic and social benefits
CHINGAZA COLOMBIA
i. Hay una pérdida histórica de cobertura vegetal en las cuencas abastecedoras de la EAAB.
ii. Cambios en el uso de la tierra con efectos adversos a los servicios ambientales.
iii. Ahorro en costos de tratamiento y conservación: Caso Nueva York y Caso Quito.
Evaluation of land use alternatives for providing environmental services
Examples of land use evaluation
• Conservation agriculture (Colombia)– Increases net
incomes, potato production, social benefits, sediment retention and employment; and reduce production costs.
– However the initial investment can not be afforded with current small farmers cash flows
Ex ante analysis
Upper part Potato cropping/conservation farming
Sediment yield (10 years) -39%
Net Income +18%
Labor employment -14%
Social benefits +40%
Middle part Potato and cereals cropping/conservation farming
Sediment yield (10 years) -49%
Net Income +1%
Labor employment +62%
Social benefits +111%
Moyobamba (Peru)Conventional
SystemConventional System with live barriers
Shade-coffee Tree plantations
Sediments (ton/10 yr)
-50% -50% -44%
Agua (m3/sec)
-11% -14%
Net Income (USD)
-9.7% +89% -5.3%
Employement +77% -5%
Initial investment
(USD)
9 13 176 470
Where to invest for environmental AND social benefits (eco-efficiency)
Áreas prioritarias de inversión
MayoresMenores
Fuentes de sedimentos
Áreas prioritarias con ahorros potenciales de tratamiento agua
Área prioritaria sin ahorros potenciales de tratamiento agua
CARBON IN THE AMAZON
Opportunity costs of REDD in threatened Brazilian Amazon forests
Börner et al. (submitted), Amazon Initiative (CIAT, CIFOR, ICRAF)
Opportunity costs of REDD in threatened Brazilian Amazon forests
0
5
10
15
20
25
30
0 5000000 10000000 15000000 20000000
Deforestation avoided (ha)
Op
po
rtu
nit
y c
os
t R
$/t
CO
2
offset price for temporary emission reductionsoffset price for permanent emission reductions
Börner et al. (submitted), Amazon Initiative (CIAT, CIFOR, ICRAF)
Jan Boerner
Price lines represent average 2007 prices at Chicago Climate ExchangeGrey areas are the result of sensitivity analyses of prices, discount rates and carbon content.
Potential equity effects of different REDD payment scenarios by tenure category
Börner et al. (submitted), Amazon Initiative (CIAT, CIFOR, ICRAF)
Tradeoffs: Maximum environmental benefit at cost of rural smallholder poor?
Jan Boerner
Fixed price means all providers get the same price per ton of carbon.Biomass targeting means that per ton payments are adjusted by average municipal per ha carbon contentQuasi-auction means that farmers can offer bids for REDD payments and only accept payments that are equivalent to above-average expected returns to their actual land uses.
Jan Boerner
Bars show total returns to land users in each tenure category under the assumption that these land users have caused the deforestation in this category. Yet, in the case of Indigenous Lands, for example, deforestation is often caused by external actors....so this has to be interpreted with caution, however, shows that most benefits would go to large landholders if REDD payments were to be made only on the basis of expected additionality.
CONCLUSIONS
• PES provide a new paradigm for natural resource management….
• …but also a new paradigm for addressing concerns of rural poverty
• Establishment of schemes must be based on sound, integrative analysis of natural, social and economic benefits
• In CIAT we’re very interested in matching with partners to generate rural livelihoods through PES. We can provide biophysical, economic and social analyses, and you…..