Propoor Rewards for Environmental Services

In Africa (PRESA)

Brent Swallow and Thomas Yatich

6 October 2006

Seminar Objectives and Outline

Our objectives:

Build a broader community of interest within ICRAF around propoor rewards for environmental services in Africa for:

1. identifying opportunities to link to existing projects

2. strengthening the technical and livelihood components of “PRESA” activities

3. Identifying opportunities for more integrated projects in the future that match / take advantage of the complexity of PRESA

Outline

1. Background

2. What are the interests for ICRAF?

3. How we use RUPES as the base for an African project

4. Overview of PRESA

5. Opportunities to link with other ICRAF projects

Background from CES scoping study

Increasing interest in “payments for ecosystem services” • Costa Rica forestry case (expanded and replicated in several countries in Meso America) – a Government programme for environmental management through financial incentives

• Catskills watershed and New York City case (replicated in several sites in Latin America and now moving to Africa) – a public to collective programme

• Biodiversity offset programmes in the United States – a government programme for efficient environmental management through tradeable conservation commitments

• Clean Development Mechanism of the Kyoto Protocol (voluntary equivalents in carbon sequestration projects; interest in other MEAs (eg Ramsar, CMS, CBD); interest in avoided deforestation)

Growing interest in propoor PES for Africa

• IISD Development Dividend Task Force; UNDP’s MDG Carbon; WWF

• IFAD support for ICRAF-led project on “Rewarding the poor of Asia for environmental services (RUPES)” – and extension to Africa

• UNEP high-level workshop on Pro-poor markets for ecosystem services, plus followup work on MDG / MEA interface (Nov 2005); UNEP / IUCN / CBD workshop on international payments for ecosystem services (Sept 06)

• IDRC -- scoping study of Compensation for Ecosystem Services – ICRAF, Forest Trends, IUCN, CGRR (Ecuador), ISEC (India), ACTS (Kenya

• Katoomba Group meeting for East & Southern Africa (Oct 2005 & Nov 2006). Forest Trends new $6 million GEF project on strengthening capacity.

• Ford Foundation linking Indonesia, Kenya & South African experiences in PES

• WWF / CARE / IIED Programme on Environmental Services

• IUCN partnerships on conservation finance (mostly Asia)

• GEF and World Bank projects on PES (mostly in Latin America)

• Project experience with community-based ecotourism and green labelling

Definitions and concepts

Payments for environmental services”: 1) well defined service, 2) voluntary transaction 3) conditioned on provision of the service or land use likely to produce the service, 4) minimally comprising one buyer and 5) one seller (Wunder).

But controversy, question and confusion … … few pure PES schemes in existence, although several PES-like schemes (conditionality as a critical gap)… unclear how to really engage the private sector… transaction costs may bias toward relatively wealthy people, … loss of sovereignty (Ecuador Amazon peoples), … compensation for damage versus rewards for action… little evidence of the CDM working in Africa … targeting payments for efficiency and impact… different types of rewards including monetary, property rights, public services, alternative enterprises… different perspectives on payments / rewards for environmental services

Background

Planning perspectives:• Wildlife conservation -- conservation finance • environmental management – incentives + regulation (beyond ICDPs) • economic planner – more flexible tools for efficiency• environmental benefits of investments undertaken for other purposes (eg Working for Water) • poverty reduction – new stream of income for the rural poor

Social justice perspective:• rural empowerment – redress social inequities• threat to rights of already disadvantaged indigenous peoples• peace and justice – way to manage conflicts over resource use and benefit sharing

Background

Business perspectives:redressing damage, CRS, complying with regulations, maintaining sustainable supply

Farmers’ perspectives:achieve recognition of the legitimacy of land use, enhance access to government programme, generate a new source of revenue for a defined service

ICRAF and propoor rewardsWhy ICRAF?1. The dominant regulatory approaches to land management focus on

segregation of land uses, with intensive land uses walled off from protected areas and forests no place for agroforestry.

2. ASB and other studies show that agroforestry systems that integrate trees into landscape mosaics often generate good levels of environmental services and livelihood benefits. Other ICRAF studies clarify cause and effect relations.

3. Rewards for environmental services can provide extra incentives to farmers maintain agroforestry land uses particularly useful to environmental objectives.

4. Combinations of recognition, regulation and rewards will be appropriate in different contexts.

5. Agroforestry as a nice entry into a complex problem.

6. ICRAF already established as a global leader and the RUPES as a brand.

PRESA: Building upon RUPES

Strengths:• Network of sites• Nested scale approach• Tools and approaches• Better recognition of smallholder farmers in sites• Country-level uptake and ownership

Weaknesses:• sites unevenly distributed across Asia• too long to get to working mechanisms in sites• did not link to similar initiatives in the region• inadequate links to IFAD loan projects

PRESA Objectives

1. Site-level engagement- scope, establish and monitor pro-poor rewards for ecosystem services

2. Policy and private- sector engagement-facilitate information exchange and negotiations among key stakeholders

3. Community of practice- support the sharing and sharing of assessment tools, methodologies and mechanisms among a community of practice

PRESA site-level activities:

1. Develop and adapt assessment methods and approaches from RUPES

2. Appraise causal links between RES, incentives, resource use, institutions and environmental services.

3. Determine appropriate targets for enhancing environmental services and livelihoods.

4. Develop institutions to support reward mechanisms that are effective, equitable and sensitive to the needs of marginalized groups.

5. Develop and test prototype reward mechanisms.

6. Establish, implement and facilitate operational reward mechanisms.

7. Monitor, evaluate and assess impacts.

PRESA policy activities:

1. Conduct a survey of private and parastatal firms to determine factors motivating and constraining their participation in RES

2. Evaluate the business case for rewards from perspectives of private sector, parastatals and beneficiaries of watershed services.

3. Review and synthesize site-level results for policy.

4. Identify policy factors that constrain the business case for rewards and convene consultations among stakeholders.

5. Present results at international fora.

PRESA community of practice

1. Disseminate and adapt RUPES Technical Advisory Notes

2. Support application of tools, methodologies and mechanisms among a community of practice

3. Establish relations with international, regional and national organizations interested in RES

4. Convene side events at Katoomba Africa or other relevant international meetings

Criteria for site selection

• High probability of a workable reward scheme for environmental services;

• Geographical priorities of IFAD or regions of its investment projects;

• Geographical interests of partners;

• Environmental services of interest to agroforestry and IFAD

• ICRAF’s ongoing or active research programs

PRESA core sites

Sites EnvironmentalServices) in

focus

Possible reward mechanism Collaborators

Kasyoha-Kitomi forest landscape (Uganda)

Bundling forest ecosystem services

Financial payments, input support and extension services in exchange for carbon sequestration.

Restricted access to forest reserve resources in exchange for the protection, restoration and ”co-management” of Biodiversity and landscape level resources

WWF-EARPOEcotrust, Nature Uganda,, ICRAF

Uluguru Mountains (Tanzania)

Bundling forest Ecosystemservices

Financial payments, input support, and extensionservices in exchange for improved watershed

management; Financial payments, input support and extensionservices in exchange for carbon sequestration;

Restricted access to forest reserve resources in exchange for the protection, restoration and ”co-management” of biodiversity

CARE-Tanzania, TFCG, IIED, WWF and ICRAF

PRESA core sites (cont’d)

Sites Environmental Services) in

focus

Possible reward mechanism Collaborators

Mt. Kenya East Catchment (Kenya)

Regular supply of clean water for urban, domestic, irrigation, hydropower production and downstream uses

Conditional rewards for adoption of better-farming practices leading to reduced soil erosion, sediments in downstream dams and improved production

Line ministries, KWS, Forest Department, MKEPP-NRM, UNOPS, GEF, Katoomba Group

Conservation of Fouta Djallon highlands (Guinea)

Primate conservation, tree diversity conservation, and watershed protection

Support for tree and forest-based enterprises in exchange for biodiversity and watershed conservation and build rural communities capacity for agricultural production

CIFOR, USAID, Local government,

PRESA associate sitesEnvironmental Services) in focus Possible reward mechanism Collaborators

Lake VictoriaBasin

Land restoration for enhancing soil fertility, restoring watershed functionbiodiversity and carbon sequestration

Carbon offsets through either voluntary or CDM market

KARI

AberdaresNCWSC(Kenya)

Regular supply of clean water downstream and urban squatter settlements & biodiversity conservation

Financial payments, input support, and community forest groups in exchange for restoration of gazetted forests

NCWSC, JKUAT

Allanblackia project sitesin Tanzania

Landscape level tree diversity in multi-functional landscapes adjacent to protected areas

Financial payments for planting and maintaining diverse tree stands on farm

ICRAF, Unilever, IUCN, NARIs,SNV, TFCG

WesternUsambara (Tanzania)

Biodiversity conservation; watershedprotection (large drylands in valleys supported by Usambara Mountains)

Support for community and district-level negotiations over NRM, processes for small-scaleirrigation; extension support Indigenous tree species; co-Management of protected areas; conditional water, biodiversity, carbon payments.

ASARECA, AHI,Ministries of NR and Tourism, agriculture, Water and TAFORI

Opportunities for linking to other ICRAF activities in Africa

• Western Kenya Integrated Ecosystems Management Project

• Allanblackia project

• land degradation and carbon stock / carbon sequestration assessments

• hydrologic and ecosystem modelling for targeting

• Joint CIFOR / ICRAF biodiversity unit

• ….

Conclusions

1. IFAD’s Executive Board reviewed the PRESA proposal yesterday

2. Aberdares / Nairobi water project looks to be on track

3. UNEP project on potential for using reward mechanisms in the Lake Victoria basin is on track

4. Opportunities to link to other ICRAF projects, recognizing that not all sites are appropriate

Conceptual Foundations

1. Compensation for environmental services – “polluter pays” for damage that they inflict on others

2. Rewards for environmental services – “beneficiary pays” an ecosystem resident who foregoes legitimate uses of the ecosystem or undertakes positive investment in the ecosystem services

3. Markets for ecosystem services also refer to tradeable pollution or tradeable resource use rights

4. The regulatory environment and distribution of rights define the baseline viz rewards and compensation.