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Outline
• How property rights & collective action shape PES opportunities
• Effects of PES on property rights & collective action
• Designing PES to accommodate property rights & collective action concerns
• Brief case study illustrations
Property rights scenariosPrivate public
Individual group
Collective action scenariosActive cooperation passive coordination
Property rights constrain and shape PES
• Land tenure as requirement for setting up PES– Land user must be able to commit over many
years – Costa Rica national program: only land owners
eligible
• Where property rights aren’t clear, PES design will require creativity
Collective action requirements may shape PES
• Where ES has threshold effects, collective action is required• E.g. biodiversity and watershed services
• Must design PES to coordinate service provision
– Coordination could be active or passive
PES affects property rights• PES confers property rights
– Legitimizes land user’s presence– Legitimizes the land use (if PES is voluntary)– Buyer owns the ES
• If PES raises land value it may reduce land access– Lose the lease or pay higher rent– Lose access to commons
• The wealthy and powerful encroach• Govt. restricts access
PES affects collective action
• Would a group-based PES encourage or discourage collective action?– Must work together to gain payment– Will payment per se encourage or discourage
collective action?
• Cash incentive can crowd out other sources of motivation
Property rights, collective action, & design of PES
• Conditionality• Transaction costs• Types of payments and rewards• Individual vs. group payments/rewards
Conditionality
• The key feature of PES• Suggests that payment should be:
– On a regular basis, not just one time.– Directly proportional to the level of
environmental service provided.
Transaction costs
• Types of transaction costs:– Search, negotiation, contracting, monitoring,
enforcement, insurance
• High fixed costs:– Total cost/ha falls with larger contracts
Ways to reduce transaction costs
• Improved monitoring technology• Institutional innovations:
– Group contracts– Intermediary organizations– Build on existing local institutions– Participatory monitoring– Low cost data collection systems– Bundling services
Types of payments
• Cash• Conditional land tenure security• In-kind services & development
support– training, employment, market
access, infrastructure
Cash
• Straightforward and simple• Facilitates annual payments• Divisible and direct
– Good for individual-based systems– Possible problem if group contract
Conditional land tenure security
• Used on illegally settled land• Eviction if service not delivered• It’s indivisible – useful for
group PES systems• Does not facilitate annual
payments• Challenges to conditionality:
– May be difficult to revoke in long term even if ES not sustained
In-kind services/development support
• Could be a form of payment• Questions about enforcing
conditionality – Could it bring in-migration?– Can it be revoked?– Ethical concerns
• Hypothetical: bonuses and fines on a local development budget
Group or individual contract?
• Individual– Simple conceptually– High transaction costs for
contracts with many small holders
– Low transaction costs for large contracts
Group or individual contract?
• Group– Useful if many small landholders– Useful if threshold effects– Reduces transaction costs for
buyer– Transfers transaction costs to
group• Monitoring, administering payment
– Concern about elite capture• Can avoid with indivisible, noncash
payments
Agglomeration bonuses• Useful where threshold effects with large landholders• Low level coordination, avoids transaction costs
Source: Goldman et. al 2007)
TIST
• The International Small Group Tree Planting Program – Tanzania, Kenya, Uganda, India
• Carbon sequestration credits– No threshold effects individual
contracts– Simple monitoring and payment
systems– Annual payment per live tree
Sumberjaya, Indonesia• ~5,200 participants divided into 18 groups
covering 11,000 ha gov’t forest land• Tenure security is the reward
– Has teeth now, but later?– Development budget?
• Group internalizes some of the transaction costs
• Some participants not aware of program– Group arrangement facilitates participation– Sustainability?
Sukhomajri, India
• Watershed protection via forest protection– Between city and village; within village
• Village gets irrigation water as reward• Landless have water rights
– They share the value of the ES they provide– Villagers came up with this idea
• Forest Dept. granted rights to products of protected forest– But wanted it back when it became valuable
Panchayat and Revenue lands in India
• Link community forestry programs to Chicago Climate Exchange?
• Government owned lands– Allows villagers to “borrow” these lands for
productive purposes– But if land generates cash, govt might want it back