CAITLIN PATTERSON, RESEARCH ASSOCIATEC.PATTERSON@CGIAR.ORG

Evaluating Rewards for Environmental Services Schemes

The Project

Work completed during 6-month contract with ICRAF, IISD, funded by CIDA

Purpose of Research: filling in knowledge gaps in RES project logistics, challenges and opportunities

Deliverables: one article based on analysis of survey data – presented at 2011 Earth Systems Governance Conference, one article based on interviews conducted with project developers

RES Project Survey

Distributed through IISD listservs

99 responses received

Objective: “to gather information about successful RES schemes in order to see which lessons could be learned, where the main challenges lie and what could be done to develop appropriate benefit sharing schemes in the future”

Survey Results

55 projects analysed

Location: Africa -23Latin America - 12 Asia – 10North America – 3Europe – 2Australia – 1Multiple locations – 3

Status:Fully functional – 21Planning phase – 18Pilot phase – 14Completed – 4Between stages – 2

Size:Small (0-999 participants) – 22Medium (1000-9999

participants) – 14Large (10000+ participants) - 8

Findings: Funding

Primarily from corporations, national and international markets, and national and international funds

Rewards most commonly distributed in form of payments, services, or in kind contributions

Eleven projects surveyed did not offer any type of financial reward to project participants

Findings: Contracts and Benefit Sharing

Short, simple agreements outlining objectives, and where applicable, a payment schedule

1/3 projects surveyed contracted directly with landowners; clear land tenure a central requirement

Also entered into by a group on behalf of project participants

Benefits were given to the group, which then decided how to distribute them

Findings: Challenges and Conflicts

Nearly half of projects cited lack of sustainable financing and a general lack of awareness or understanding surrounding the concept of RES and benefit sharing

To overcome, some engaged community representatives in an attempt to build trust

Uncertainty regarding the future of regulatory carbon markets as a barrier to further financing

Regulation in this area may influence the direction of growth for RES

RES and the CES/COS/CIS Paradigms

Projects examined through the paradigm framework developed by van Noordwijk and Leimona (2010) – “Principles for Fairness and Efficiency in Enhancing Environmental Services in Asia”

Commoditized Environmental Services (CES), Compensation for Opportunities Skipped (COS), Co-investment in (landscape) Stewardship (CIS)

How to define RES as the concept evolves? Do the paradigms fit with our findings?

Commoditized Environmental Services

The most common type of RES scheme on the voluntary carbon market

Direct interactions between the providers of ES and ES beneficiaries

Benefits accrue to those who control access to land or resources, can function as an alternate source of income

Compensation for Opportunities Skipped

Paying land users to accept restrictions on their use of land

Actors: government, private sector, local community

Offers a financial incentive that encourages land users to forego legal and economically viable land use activities that negatively impact environmental services

Co-Investment in (landscape) Stewardship

“(1) negotiated tenure, conditional on ES maintenance; (2) reduction of land use conflicts and their collateral damage to ES; (3) investment in improved public services, feeder roads under community control, and (4) land use and development planning that creates employment that does not damage ES”

Can take place on community or state-owned land Actors: government, private sector, local

community

Findings: Paradigms

Differences in rewards and actors resulted in many projects defying classification under just one paradigm

Useful to categorize different projects, but certain groups of characteristics do not belong wholly to one kind of project

Future research in this area should examine ways to illustrate the fluidity of project characteristics across different types of projects

RES Project Interviews

9 follow-up interviews were conducted with survey respondents to explore issues raised in the survey

Interviewees were chosen based on project location, size, type (carbon/water/biodiversity) – wanted broad representation

Semi-structured, questions touched on areas such as funding, benefit sharing, gender/cultural norms, trust/participation

Questions Raised by the First Article

Non-financial rewards can secure participation – how?

Uncertainty in the carbon markets – how much is this impacting projects?

Respondents believed their projects were alleviating poverty – are they?

Financial Vs Non-financial Benefits

Payments are important for recruitment, but a combination of financial and non-financial benefits important for the long term

In some cases, payments quite small, revenue is more from products generated from the land

Productivity, market access, capacity building – more sustainable long-term revenue

Selecting Participants/Project Area

Project areas were chosen based on any combination of three factors:

Host organizations had conducted work in the area previously

The area suffered from serious environmental problems

Communities in the area were impoverished and eager to work with the host organization

Participation/Trust

Trust building a crucial part of project development

How? Extensive community consultation, recruiting a community ‘champion’, partnering with other NGOs working in the area, flexible project design

Payments effective for recruiting participants, but non-financial rewards that helped increase revenue were also used

Threats to Success

Several projects having trouble selling their offsets

One project developer having trouble with Plan Vivo offsets – investors unfamiliar with it

Investors also reluctant to fund startup costs – difficult to predict

Large-scale land uses sometimes ran counter to RES project goals

Pro-poor?

Balancing fairness and efficiency – ES generated in low-income areas, prioritizing efficiency could increase existing inequalities

Most developers classified their project as pro-poor because they were located in an impoverished area

Many required minimum amounts of land

Only one project required female participation

Clear land tenure required by majority of projects

Conclusions

Van Noordwijk et al. (2007) – weakly pro-poor vs strongly pro-poor

Most projects weakly pro-poor – distributing income from ES buyers to ES sellers

Not strongly pro-poor, which would improve income distribution at community level

Problems selling Plan Vivo = problems selling pro-poor projects?

Conclusions

Issues of large-scale land use activities impacting RES projects – how to reconcile these aims?

Major knowledge gaps still exist; project developers want to know more about strategies learned by others

Need for research on funding – example: how to better predict startup costs, encourage investment

Thank you!