Paying People to Protect the Environment?

Development specialists are becoming increasingly interested in the “Payments for Environmental Services (PES)” concept as a way of protecting the environment while reducing poverty.

With support from the Swiss Development Agency, two CIFOR researchers, Sven Wunder and Nina Robertson, are looking at applying the PES concept in Bolivia, and are cautiously optimistic about its future.

A PES scheme is an arrangement where a well-defined environmental service or service-resource is "bought" by beneficiaries of the service from local service providers. For example, a city council downstream from a major water source may pay people living upstream not to cut down the trees near the river, so that water quality is maintained. In effect, the environmental service providers are paid for not using the forest in ways that would jeopardize the environmental service.

Bolivia: paying upland farmers to protect downstream water supplies from being polluted by animals is one example of a community service payment.

According to Wunder, it is a fairly straightforward concept, "But in Bolivia, we found none of (the schemes) actually conformed fully to the definition. What we did find were a lot of initiatives where some but not all of the definition's conditions were met." Wunder says that sometimes external donors make the payment, not the intended service users, or the PES is linked to non-environmental services such as tourism.

The reason the Bolivian schemes do not fully conform with generally accepted PES principles is partly because environmental service payments is still a very new idea. "People take environmental services for granted, so the notion of suddenly paying for them is hard to swallow. PES schemes require mutual trust .. and an institutional framework to facilitate that,” adds Wunder.

Also, many people are skeptical about market-based incentives. According to Robertson, PES is sometimes seen "as part of a larger neo-liberal economic paradigm being implemented in developing countries to their disadvantage. For example, paying for watershed protection is sometimes erroneously equated with water privatization."

Nevertheless, the two researchers are optimistic. If the international development community is willing to experiment with PES activities and help increase public awareness about PES, such schemes may yet offer a win-win solution.