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«THE ROLE OF PAYMENTS FOR ENVIRONMENTAL SERVICES (PES) AS REWARD MECHANISMS FOR SUSTAINABLE LAND MANAGEMENT IN EAST AFRICA WORKSHOP REPORT ...»

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5.1 Supporting the conservation of biological diversity and alleviating poverty: Experiences from Trees for Global Benefits Programme (Plan Vivo Uganda) Pauline Nantongo Kalunda, Environmental Conservation Trust (ECOTRUST) of Uganda The NGO leading this carbon project, ECOTRUST works with farmers’ groups to generate and pool together carbon sequestration and storage (from avoided deforestation) credits for sale in the voluntary carbon market, following the Plan Vivo model. Farmers may engage in agroforestry, reafforestation, or restoration of degraded forests with mixed native trees, as well as forest conservation.

In addition to the carbon sequestration payments received directly from ECOTRUST, farmers also gain from the development of small scale agro-forestry enterprises (timber, poles, fuel wood, fodder, fruit and honey production).

5.2 Pro-poor PES Design: Potentials and obstacles for the poor to benefit as suppliers of environmental services Thomas Yatich/Vanessa Meadu (ICRAF Kenya) The presentation showed that the extent to which PES schemes may contribute to poverty reduction depends on (i) the security of their ownership or use rights to the land they manage, (ii) whether these communities would be capable of managing such a land to provide desired environmental service (iii) if there are mechanisms in place to measure and verify the provision of ecosystem services-contingency, for details see: http://www.planvivo.org/fx.planvivo/scheme/uganda.aspx Payments for Environmental Services from Agricultural Landscapes- PESAL Capacity-building workshop, FAO- CARE Tanzania Dar es Salaam 4-6 February 2008 Final Report (iv) and the transaction costs associated with aggregating PES for many small-scale resource stewards can be effectively managed.

In any case, when implementing a PES scheme, a first concern should always be (i) not to further harm the poor, (ii) make sure they are included, (iii) and if possible positively bias the scheme’s rules to prioritize their participation, which is particularly possible in cases where the buyers are interested in social co-benefits of their investment in the environmental services scheme.

Several options are possible, depending on the circumstances (Box 14).

Box 14: Pathways for poverty reduction through RUPES mechanisms

- Stop negative 'drivers' that enhance poverty and degrade environmental services (‘RUPES')

- Enhance local environmental services and resources (e.g. regular supply of clean water, access to beneficial plant and animal resources)

- Enhanced security of tenure, reduced fear of eviction or 'take-over' by outsiders, allowing investment in land resources; increased asset value

- Enhanced trust with (local) government, increased 'say' in development decisions

- Increased access to public services (health, education, accessibility, security)

- Payment for labour invested at a rate at least equal to opportunity cost of labour

- Increased access to investment funds (micro credit or otherwise) for potentially profitable activities

- Entrepreneurism in selling 'commoditized' environmental services

5.3 Enabling Environment: Institutional barriers to PES development and enabling legislation in East and Southern Africa Alice Ruhweza, The Katoomba Group In investigating whether the laws, practices and institutions can support, or at least not obstruct, the development of PES schemes in East Africa, it has been found that although the general policy is not obstructive, there are no specific provisions for PES development and the government authorities are not yet familiar with the mechanism and its potential. At the same time, the private sector is becoming more aware of the opportunity posed by PES, both in terms of environmental outcomes, and as an investment in social responsibility. There are support services being provided by NGOs and consultants, which can represent considerable costs.

6. Main discussion results The results of the discussions showed that PES schemes may represent an incentive to the adoption of sustainable land management practices in East Africa. Nevertheless, it is necessary to improve the institutional capacity and adjust the legislative framework to charge for, and invest in the management of regulating ecosystem services. The need for stronger collaboration between policy makers and natural resource managers, especially from the agricultural sector, was also considered key for the further development of PES schemes in the region.

A few topics have been examined and discussed more thoroughly, as specified in what follows.

6.1 Sustainability of PES schemes Donor funds will normally only be present for the feasibility and start up phases. Therefore, securing contributions from the users of the environmental services generated is the breaking point when considering the sustainability of a PES scheme: there is the need for reliable trustworthy buyers.

Implementation relies on private and public buyers. If the scheme is successful in generating the expected environmental benefits, the users want to continue paying in the long run. There is the need for fair and reasonable taxation: optimal taxation to create the correct incentives for efficient resource use and responsible environmental performance should be an option, perhaps targeting first the larger users/polluters.





Payments for Environmental Services from Agricultural Landscapes- PESAL Capacity-building workshop, FAO- CARE Tanzania Dar es Salaam 4-6 February 2008 Final Report

6.2 Combining enforcement and accountability of investment with equity goals One challenge for PES programs is to understand how to ensure that buyers receive the service they are paying for and how to match pro-poor goals with private sector focus on getting value for money.

This is especially a problem in cases where the payments are not conditional and periodical such as in pro-poor schemes where payments are made in kind and one-off (e.g. the provision of road access or improvements in education or health services) (see box 15).

It is crucial to see how to ensure that providers are accountable. For example, in the case of CARE’s work in Kibungo, the village council owns the land and can therefore enforce the obligations the farmer has taken on.

6.3 The role of institutions Public authorities play a crucial role in acknowledging the value of environmental services (e.g. the Tanzanian Forest and Beekeeping division are working to inform the government of the total value of the country’s forest resources to inform their policy decisions) and in facilitating collection of payments and its effective investment, either through the competent authorities already collecting this kind of fees and/or by supporting the work of newly created independent schemes with the same aim. Although a wide range of institutions on which to build on for PES development already exists, there is the need to improve networking and communication between the various government bodies and meeting such as this workshop can play an important role.

6.4 Work group session 1: assessing supply and engaging demand From the group discussions (two on two fictional scenarios - one in the catchment of a small lake, another in the upper catchment of a river, and one last one focusing on the actual conditions in the Kagera river basin) emerged that when assessing supply it is very difficult to balance provisioning services (ie. production) and regulating/supporting environmental services. Land management practices will have to adjusted if the land is managed across a variety of services, but sustainable practices existed for this and can be adjusted.

On the demand side, the discussion showed that one of the greatest problems in engaging buyers is the risk that the land use changes and adoption rates do not yield the expected result in a suitable timeframe. This may be an obstacle for the investor. It was also clear that the proposed exercise is only really possible with more detailed information on the landscape management options and interests of the buyers are available.

6.5 Work group session 2: enabling environment.

The working groups identified the institutions potentially involved in PES programmes in each country, together with the existing laws that have to do with natural resource management and environmental services from agricultural landscapes. Missing institutions as well as legal and regulation barriers were also identified, together with what is needed in terms of coordination mechanisms, PES awareness (among suppliers, buyers and local authorities) and applied research (baseline data, economic valuation of resources and potential returns through PES incentives, hydrological studies, and technological innovations).

All groups agreed that there is the need to minimize risks to suppliers and buyers (e.g. by building capacity in negotiation skills, increasing knowledge of which ES is sold or bought, establishing an independent arbitrator and a buyer or seller forum, auditing, etc.) and to have a reliable monitoring system (employ local communities to conduct monitoring, need for independent 3rd party monitoring, etc.).

Some cross cutting issues were also discussed: transparency and accountability (publication of results and process, clearly defined rules and procedures), efficiency (strong institutional foundations, minimize transaction costs, use of secure delivery/reward systems), equity (pro-poor design of PES programs).

Payments for Environmental Services from Agricultural Landscapes- PESAL Capacity-building workshop, FAO- CARE Tanzania Dar es Salaam 4-6 February 2008 Final Report

7. Workshop evaluation feedback general expectations included learning about PES best practices active institutions in the field networking and knowledge sharing, which were met by all participants most effective part of the workshop the overview provided by presentations and especially the working group discussions good basis info on ecosystems and NR management practices overview of areas where PES mechanisms can apply suggestions for improvement sessions could have been shorter and with fewer presentations provide participants with well established case-studies to illustrate the practicalities guidelines for group work could have been more precise a field trip to a PES site for all participants expectations for use of information/skills/contacts made at the workshop information useful for further work back home useful background to support the institutionalization of PES in the region networking will allow for future collaboration.

Ongoing & upcoming work relevant to the region6

- Globally Important Agricultural Heritage Systems (FAO-GEF-UNDP project)- the case of Maasai Pastoral Rangeland Management (Kenya and Northern Tanzania) http://www.fao.org/sd/giahs/next.asp - contact Sally Bunning, FAO

- Katoomba regional meeting upcoming in September, in Dar es Salaam to present the ES market assessment results- contact Alice Ruhweza, Katoomba group

- GEF-UNDP Project on institutionalizing PES will also be providing materials and learning network with two trial sites two in Africa and two in tropical American. The Ecoagriculture Partners Market Assessment materials are embedded in this project- contact Thomas Oberthur, Ecoagriculture Partners

- WWF-CARE-IIED Equitable Payments for Watershed Services project, now entering phase 2. In Tanzania this includes full operation in Morogoro and upscaling to the Usambara mountainscontact Dosteus Lopa, CARE Tanzania

- FAO PES in Agriculture Landscapes- PESAL website Combined with the work on the State of Food and Agriculture report 2007- Paying Farmer for Environmental Services, the Agriculture Development Economics Division of FAO has now launched a website providing an overview of the rationale and potential of PES to improve incentives for sustainable land management, and offering a synopsis of the process for the design and implementation of such schemes, always with a focus on the role of agriculture and with pro-poor options inbuilt in each section.

This website is also part of the work done under the Payments for Environmental Services from Agricultural Landscapes- PESAL project, which included a set of environmental services demand assessments (available though the website as PESAL Papers, under Materials).

The website can be found directly at http://www.fao.org/es/esa/PESAL Contact Leslie Lipper, FAO please refer to the participants list in annex for contact details Payments for Environmental Services from Agricultural Landscapes- PESAL Capacity-building workshop, FAO- CARE Tanzania Dar es Salaam 4-6 February 2008 Final Report Annex 1: List of participants

TANZANIA

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Dr Bakari Asseid, Department of Commercial Crops Fruits and Forestry, Zanzibar b.s.asseid@redcolobus.org Mr Tamrini Said, Department of Commercial Crops Fruits and Forestry, Zanzibar tamrini@yahoo.com Mr. Fredrick Baijukia, Agriculture Research Institute (ARI) Maruku, Bukoba freddybai@yahoo.com

–  –  –

Payments for Environmental Services from Agricultural Landscapes- PESAL Capacity-building workshop, FAO- CARE Tanzania Dar es Salaam 4-6 February 2008 Final Report

–  –  –

Ms. Pauline Nantongo Kalunda, ECOTRUST - The Plan Vivo implementer in pnantongo@ecotrust.or.ug Uganda Mr. I. Oluka Akileng, Forest officer in Ugandan Ministry of Water and Environment oluka.akileng@yahoo.com Ms. Hellen Natu, Socio-Economic Development & Benefit Sharing project, Nile hnatu@nilebasin.org Basin Initiative

BURUNDI

Mr. Ndabirorere Salvator, Burundian Ministry of Environment, Planning and Public nasalvator@yahoo.fr Works

UNEP RISOE CENTRE

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FAO SOUTHERN AFRICA

Mr. Martin Ager, FAO Land and Water Officer Sub Regional Office for Southern Martin.Ager@fao.org Africa

FOOD AND AGRICULTURE ORGANIZATION OF THE UN- FAO

–  –  –

Dr. Thomas Oberthür, Director of Markets Ecoagriculture Partners, position t.oberthur@gmail.com hosted by International Center for Tropical Agriculture (CIAT)

CARE TANZANIA

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