How to make a successful environmental services scheme

By Robert Finlayson

Schemes that reward poor farmers for protecting the environment can succeed if they meet several conditions, say scientists at the World Agroforestry Centre in Indonesia.


Scientists, governments and civil society organizations have been working together for many years to establish practical schemes that reward poor, upland farmers for their work in maintaining healthy landscapes that provide environmental benefits to themselves and many more people living in the lowlands.

The Rewards for, Use of, and Shared Investment in Pro-poor Environmental Services (RUPES) project is one such research collaboration. Its Indonesian section has recently released a set of points about how to ensure the success of a rewards’ scheme.

‘We studied a number of different schemes in different parts of Indonesia, all of which featured unique conditions’, said Mr Chandra Wijaya, the RUPES manager for Indonesia. ‘These case studies taught us much. They allowed us to provide high-quality advice to the Government of Indonesia about environmental services’ regulations that would ensure future schemes were successful.’

The studies also demonstrated useful innovations in implementing schemes in protected areas with local communities’ involvement.

‘These qualities of case studies are really the first point for ensuring schemes will be successful. Rewards for environmental services’ schemes have to be in harmony with regulatory approaches to better manage the environment and alleviate poverty’, he said.

According to the RUPES scientists, governments should set the optimal level of acceptable protection of the services provided by the environment as a baseline within their regulatory frameworks, allowing voluntary actions that improve environmental qualities.

A well-managed watershed provides beautiful benefits

A well-managed watershed provides beautiful benefits

Another factor is public funding: how much is allocated, where it’s allocated and who manages it. This is crucial for schemes that are primarily public investments with poverty alleviation goals as well as environmental ones.

‘In Indonesia, substantial amounts of public funds are currently allocated to reforestation programs that often don’t meet their objectives’, said Dr Beria Leimona, environmental services consultant with the RUPES project. ‘Such funds could be more effectively used to support flexible environmental services rewards’ schemes.’

Once funds have been allocated and the negotiations between farmers and the ‘beneficiaries’ of the environmental services—for example, hydropower plants, drinking-water utilities, carbon buyers, tourism operators—reach the stage where a contract is being prepared, ‘conditionality’ should be addressed carefully.

This means that conditions should apply to the provision of services and the rewards that are given in response. An environmental services’ contract should ensure the accountability of forest rehabilitation, for example, by detailing how the farmers and other local community members will plant and maintain appropriate trees, who will monitor progress and what and when rewards will be provided for meeting the conditions.

‘It’s really important to set the right levels of conditionality’, said Mr Wijaya. ‘The farmers need to be comfortable with the services they are expected to provide and the buyers need to know that they are getting what they wanted. If the expectations are too high then not only will the locals fail to deliver but the buyers won’t provide the rewards. Trust will have to be rebuilt, which is a slow and often difficult task after a less-than-successful first attempt.’

To ensure that conditionality is appropriate and achievable, two things are needed. First, farmers’ local knowledge should be integrated into the scheme. A top–down approach is unlikely to get the desired results. Second, intermediary organizations that help farmers and buyers negotiate need to be honest and trusted by all involved.

‘A trusted intermediary is one of the key factors for establishing and running a successful scheme’, said Mr Wijaya.

Once a scheme is up and running, joint monitoring of the contract by the farmers, the buyers and a third party such as the intermediary will increase accountability, reduce the likelihood of disagreement and build more trust and respect.

And with the monitoring demonstrating that a scheme is successful, it’s a good time to see about expanding it to other areas. For that to happen, strong political will in the local government is needed.

‘You really have to have champions inside the local government that you’ve been working with to achieve success’, he said. ‘Preferably, the champions should be in senior positions so that their peers in neighbouring governments will listen to them with respect and take their words seriously.’


More information about RUPES

Video: Beria Leimona explains the concept and practice of environmental services and





This work is part of the CGIAR Research Program on Forests, Trees and Agroforestry.





Rob Finlayson

Robert Finlayson is the Southeast Asia program's regional communications specialist. As well as writing stories for the Centre's website, he devises and supervises strategies for projects and the countries in the Southeast Asia region, including scripting and producing videos, supervising editors and translators and also assisting with resource mobilization.

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