Africa’s ecosystem-services schemes face many challenges

Supporters of payments-for-ecosystem-services’ schemes in Africa should reconsider the use of strict financial approaches and look to co-investment, says Leony Aurora

 

Schemes that commodify the services provided by an ecosystem—such as clean air and water, landscape beauty and carbon storage—typically involve ‘buyers’, for example hydropower companies, making payments to ‘sellers’ of the services, who are usually local communities who maintain and protect forests or sustainable agroforestry or agricultural areas.

Drawing water in Africa

Markets and buyers of ecosystem services in Africa are generally underdeveloped, leaving poor farmers unable to boost their incomes through preserving services. Photo: World Agroforestry Centre/Sherry Odeya

However, in Africa, studies have shown that so far these types of ‘payments for ecosystem services’ (PES) schemes work only for carbon storage and as such are quite limited, said Sara Namirembe, a scientist at the World Agroforestry Centre. She was presenting at the 6th Annual International Ecosystem Services Partnership Conference in Bali, 26–30 August 2013.

According to Namirembe, commodification schemes are knowledge intensive and require scientific intervention to prove that an ecosystem service has been delivered. The local people, that is, the sellers of the services—whose job it is, for example, to reduce soil erosion through improved agricultural practices and thereby improve water quality in a watershed—haven’t had the capacity to do the scientific monitoring and evaluation needed to verify if they have achieved their contracted goals.

Another challenge is simply finding buyers for the ecosystem services provided by local people.

‘Market development and the number of parties who are willing to pay for ecosystem services in Africa is probably much lower than anywhere else in the world,’ said Namirembe.

For example, there may only be one or two potential buyers who might be interested to pay for better quality water provided through improved protection of forests and soils in the upstream of a watershed.

‘If they decide they don’t want to participate, then that’s the end of the project’, she said.

Namirembe looked at 50 projects categorized loosely as ‘tree-based PES’ in Africa. Of these, 15 were of the commodification kind and six used the compensation approach, where providers, such as local farmers, are compensated for foregoing potentially more profitable but ecosystem-damaging activities (their ‘opportunity cost’). Under  a compensation scheme, payments to local participants are based on the ‘opportunity cost’ of implementing good land-use practices and not on the provision of evidence of an increase in carbon storage or better protection of biodiversity.

The remaining 29 projects, which represent the majority, used the so-called ‘co-investment’ approach. With co-investment there is no buyer nor seller but stakeholders with different assets—such as finance, labour or land—who agree to tackle a specific threat to the environment. Such an approach potentially places all parties on a level playing field as partners and co-investors. Unlike commodification, where specific buyers who benefit from certain ecosystem services provided by sellers have to be identified, co-investment applies even when there is no market. The financial investor could be, for example, a foreign donor or a company aiming to build a corporate social responsibility program around ecosystem services.

Although co-investment schemes reward effort put into dealing with an environmental threat and don’t require evidence of improved ecosystem services in order for payments to be made, they do require an improved monitoring system that increases efficiency, said Namirembe. Projects can try partnering with research or academic institutions for the monitoring part of their work, she added.

It’s clear from her study that much work is still needed to prepare stakeholders in Africa for future market-based mechanisms and protect ecosystems.

‘Africa is not market-averse, it’s just kind of market-starved at the moment’, said Namirembe. ‘It needs to maintain ecosystem flows as markets are developed.

‘It is important to note, though, that a market-based mechanism is not a panacea for using rewards or incentives to improve ecosystem services. A combination of mechanisms  is required. The value of proof of ecosystem service delivery within the commodification mechanism can be built into compensation mechanisms, which are stronger on fairness and more applicable within the African context.’

 

Edited by Robert Finlayson

 

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The 6th Ecosystem Services Partnership conference was supported by the CGIAR Research Program on Forests, Trees and Agroforestry‘s component on landscape management for environmental services, biodiversity conservation and livelihoods

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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