‘Co-investment’ schemes for ecosystem services are more likely to succeed
People creating payments-for-ecosystem-services schemes need to reorient their thinking from strict financial transactions based on performance towards ‘co-investment’, says Leony Aurora
Co-investment typically involves various groups with different types of assets working together to achieve agreed goals. These types of ecosystem services’ schemes are more likely to be successful, a decade of research in Asia shows.
Practitioners involved in these schemes need to look at the exchange of other types of capital other than purely the financial kind, such as social and human capital, according to Meine van Noordwijk, chief science advisor at the World Agroforestry Centre. Payments-for-ecosystem-services (PES) schemes are not only about efficiently keeping costs to a minimum to achieve the best quality ecosystem service—which is the goal of performance-based payments’ schemes—but neither are they only about fairness, where communities’ rights and efforts are respected and rewarded regardless of outcomes.
‘There’s a lot of space in between’, he said.
The World Agroforestry Centre began the Rewards for, Use of, and Shared Investment in Pro-Poor Environmental Services (RUPES) project in 2002, in a partnership with the International Fund for Agricultural Development. RUPES set out to learn lessons about PES, particularly on under-researched agricultural land, in six countries in Asia. Van Noordwijk and Beria Leimona, the Centre scientist who headed the project, were presenting their key results in front of 400 scientists at the 6th Annual International Ecosystem Services Partnership Conference in Bali, 26–30 August 2013.
During the early days of RUPES, which was located mostly in water catchments, the dominant complaint from the farmers and local communities who lived upstream and ‘provided’ ecosystem services, such as clean water and reduced sedimentation, was that the beneficiaries of the services who lived downstream ‘never even said thank you’, according to van Noordwijk. This highlighted what he calls the ‘pico-economics’ at play, namely, how humans often make decisions that are not strictly rational — because if they did then the option with the most tangible benefits would win —but also emotional.
PES was initially designed as a simple mechanism where buyers and sellers exchanged money for certain environmental services (for example, landscape beauty, air, water, healthy soils, biodiversity). In this commodification-of-nature model, payments will not be made if a service is not delivered.
Another type of scheme was built around the idea of compensation for opportunities lost, for example, owing to restricting the use of land. The third type of scheme identified by the RUPES project was the ‘co-investment’ kind in which everyone with an interest in the land in question agreed on what the problems with it were, what were the possible solutions and committed the different assets they had—whether financial, social or biophysical—to achieve a solution. This kind of scheme places everyone on a more equal footing as partners and co-investors, where contested opinions have to be respected.
An example of the importance of social aspects in a scheme that attempted to improve not only the environment but also livelihoods of poor farmers was demonstrated at a RUPES site at Lake Singkarak in West Sumatra, Indonesia. Farmers upstream of the rivers feeding into the lake were engaged under a voluntary carbon scheme to reforest the slopes. However, even though the financial side was ready—a buyer in Europe was willing to pay for tree planting and maintenance—the project did not perform well because the farmers felt inadequately represented by their customary institution, which was run by local elites and was the main liaison with the buyer.
‘The farmers decided to form new local groups to represent them based on the locations of their parcel of lands’, said Leimona. ‘This shows that having just a financial transaction without a social and cultural context might not lead to an operationally sustainable PES scheme, particularly in developing countries’.
‘Over time and with better capacity, co-investment projects can be moved towards other one or other of the two other types of schemes, or paradigms’, said van Noordwijk. Still, ‘… you have to start with co-investment because that’s the paradigm where we have to agree on motivation; on who shares what; and in which we can come to grips with the reality of contested space’, he added.
Edited by Robert Finlayson
This work links to the CGIAR Research Program on Forests, Trees and Agroforestry‘s component on landscape management for environmental services, biodiversity conservation and livelihoods