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Payments for environmental services gaining ground

A PES scheme in the upper Paute watershed is aiming to reduce siltation in the Amaluza Hydroelectric Reservoir (Sven Wunder)
A PES scheme in the upper Paute watershed is aiming to reduce siltation in the Amaluza Hydroelectric Reservoir
Sven Wunder

In Latin America, paying landholders to manage their natural resources sustainably is an innovative approach that can protect the environment and help reduce poverty, a new study has concluded. The most common forms of payment for environmental services (PES) schemes in Latin America are payments for watershed services, whereby downstream local authorities pay upstream landowners to retain tree cover in order to maintain a healthy supply of water. The report by the Centre for International Forestry Research (CIFOR), Making nature count, found that while large-scale government-financed payments for PES schemes can potentially protect large areas, small-scale projects are often more effective. "Small-scale, user-financed programmes are generally more focused and targeted, and tend to be more cost-effective. So it is not always a good idea to scale up PES schemes," says Sven Wunder, CIFOR scientist and project leader. "On the contrary, in some cases it may be recommended to scale them down."

Despite the success of many local initiatives, there has been some resistance to PES when resources could instead be used to reinforce compliance with existing environmental legislation. But Wunder argues that PES can complement law enforcement. In Costa Rica, a national scheme that paid landholders for forest conservation was introduced even though deforestation was illegal. "These payments were not made simply for complying with the law, but were meant to go beyond the legal standard. They compensated landholders for not extracting timber and actively protecting forests against outside intruders," Wunder explained. "This design resolved a critical legal issue that many governments today see as a key obstacle to PES implementation." In Ecuador, a large-scale government scheme has recently begun to pay smallholders in forested areas US$30 per hectare per year, in order to conserve the trees on their land. A similar project in Colombia is being planned.

Date published: March 2010


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