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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.
1. Antecedentes
1977 2001
Fuente: Ciat, 2007, Estudio contratado por TNC, EAAB, Patrimonio Natural & Parques
i. Pérdida histórica de cobertura vegetal de las cuencas abastecedoras en el Parque y Sistema Chingaza.
Aumento de Pasturas 18,9%
The numbers behind a Payment for Ecosystem Services (PES) Scheme
Agua y sedimentos producidos en Chingaza
Fuente: Ciat, 2007, Estudio contratado por TNC, EAAB, Patrimonio Natural & Parques
Vegetación páramo
Pasto "natural"
Pasto tecnificado
Papa
0
200
400
600
800
1000
Uso fuera parque (sin política ambiental)
Uso actual (con política ambiental)
Hec
tari
as In
terv
enid
as 0.0
10.0
20.0
30.0
40.0
50.0
Conservado Uso actual (con política ambiental)
Uso fuera parque (sin política ambiental)
m3/
ha/a
ñoto
nela
das/
ha/a
ño
Cantidad agua Cantidad de sedimentos
Opcion 1 Opcion 2 Opcion 3
Area a intervenir (Has) 24.000 40.000 60.000Toneladas sedimentos evitadas (Millones) 1 1,5 2Costo Aprox ($millones) 7.400 11.600 16.600Ahorros potenciales ($millones)/Año 3.500 5.000 7.000
Proyecciones Áreas Prioritarias – Opciones 1, 2, 3
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
Opcion 1 Opcion 2 Opcion 3
Area a intervenir (Has)Costo Aprox ($millones)Ahorros potenciales ($millones)/Año
Social and economic benefits for the rural poor
FUQUENE COLOMBIA
Porcentajes de Elementos por Subcuenca. Kriging.
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
8 10 12 13 15 16 17 18 19
Subcuencas
Po
rce
nta
jes NO2
NO3
NH3
P
P2O5
Elements Percentage by Catchments
Potato growersMinimum tillage
SustainableCattle ranchers
Potable water consumers
Less sediments, N, P, and more water
Positive impact on environmental externalities
Economic Compensation
Economic compensation
Participatory GamesFuquene Lake CaseAlternatives Interdependencies
Up stream
Down stream
MOYOBAMBA PERU
Land UseDigital Elevation Model
Soil TypesHydrological Response Units
Service providing units
Moyobamba watershed (Peru)
URH No. Área (ha) Sed (Ton) / Ha/ 5 yrs
Sed (Ton)/5 yrs Contribution to the total watershed sediments (%)
18 9.1 903 8217 16.5 02 5.8 500 2902 5.8 06 0.9 396 356 0.7 09 0.9 323 291 0.6 12 1.2 261 313 0.6 22 2.2 374 823 1.7 03 1.9 292 555 1.1 19 1.1 239 263 0.5
Total 23.1 3289 13720 27.6
Increase Net Income
Better environmental services
Employment generation
Farmers acceptance
Trade off Analysis
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
$/t
CO
2
offset price for temporary emission reductionsoffset price for permanent emission reductions
Börner et al. (submitted), Amazon Initiative (CIAT, CIFOR, ICRAF)
Potential equity effects of different REDD payment scenarios by tenure category
2855
1277 1333 1139
8089
3212
1183
371 384 370261
405
1487
270 192
0
3000
6000
9000
Largeholdings Smallholdings Settlements Indigenouslands
Extractivereserves
Mill
ion
R$
Fixed price
Biomass targeting
Quasi-auction
Börner et al. (submitted), Amazon Initiative (CIAT, CIFOR, ICRAF)
Tradeoffs: Maximum environmental benefit at cost of rural smallholder poor?
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…..
