27-28 September 2010, Rome, Italy
The IUCN Environmental Law Centre participated at the stakeholders consultation on “Food Security through Additional Income Generation: From Payment of Environmental Services to Remuneration of Positive Externalities (RPE) in the Agriculture and Food Sector,” convened by the FAO Natural Resource Management and Environment Department at the FAO Headquarters in Rome, Italy. Thomas Greiber, Senior Legal Officer at the Centre, was invited to give a presentation on legal frameworks for payment for ecosystem services (PES) schemes, the topic of two recent publications by the Environmental Law Centre: “Payments for Ecosystem Services: Legal and Institutional Frameworks”, and “Legal Frameworks for REDD: Design and Implementation at the National Level”.
The FAO consultation sought to establish the most current collective understanding of PES within the wider context of sustainability, with a view to analyze how it could effectively enhance food security and poverty alleviation interventions. Capitalizing on the knowledge and lessons learned during the implementation of a recently completed FAO project, “Sustainable Agriculture and Rural Development in Mountain Regions (SARD-M)” (2005 to 2010), and through the sharing of information and experiences with PES experts and practitioners, this dialogue aimed to clarify the main knowledge gaps and needs that should be addressed by a follow-up project to SARD-M, due to be implemented from 2011 to 2013.
Within a Policies, Instruments and Process (PIP) framework, three working groups discussed questions related to suitable policy tools for successful PES implementation, the way in which PES can be developed to contribute to a Green Economy, the identification of suitable instruments for PES initiatives, and existing constraints, knowledge gaps and opportunities for successful PES programmes. The main outcomes reported from the stakeholders consultation are summarized below:
The need for a common language. There was a consensus on the need to apply terms in a consistent way in order to facilitate the dialogue and understanding of PES/RPE. As terms reflect underlying beliefs and perspectives and can have vastly different meanings in different languages, the use of slightly different terms can place the emphasis and understanding on different aspects of PES/RPE. For example, using the word “beneficiary” does not fully recognize the active role of farmers as potential custodians of the ecosystems, while the term “payment” commonly refers to a monetary cash transfer, compared to the terms “compensation, reward, remuneration” which can refer also non-monetary types of compensation. Therefore, it was agreed that a glossary is needed for the following terms: ecosystem services, environmental services, externalities, public goods, voluntary, non-obligatory, optional, not mandatory.
Definition of PES. Wunder (2005) defines PES as a voluntary transaction where a well-defined environmental service (ES), or a land-use likely to secure that service, is ‘bought’ by a minimum of one ES buyer from a minimum of one ES provider if, and only if, the ES provider securing ES provision (conditionality) was taken as the main reference throughout the discussion. A clear mismatch between what a PES should ideally be (as defined above) and the implementation of PES schemes in practice was noted by the stakeholders’ consultation. However, the above definition was also considered an ideal prototype, while the implementation of PES schemes in reality would provide further understanding on the growing body of knowledge about PES schemes and how they work within the wide range of local conditions.
PES and FAO. Considering that FAO's mandate is centered on achieving food security for all, a debate took place on the potential effectiveness of PES as a pro-poor tool that could contribute to improving food security. Some points made within the discussions included: PES is an environmental conservation tool, with food security as a co-benefit; a food security PES should pursue food security while preserving environmental services.
PES and rural development. From the initial review of lessons learned, it was pointed out that in developing countries, there are very few PES projects aimed at modifying current agricultural practices into more environmentally friendly ones. It was suggested that PES could be used in different and more creative ways. For example, PES could be used to change/improve current practices or PES could be used to maintain beneficial practices already in place (i.e., a combination of both the modification and halting of certain land management practices).
PES within a wider policy framework. PES is based on voluntary agreements; thus, the policy and legal frameworks in which PES is implemented often determine the success or failure of PES initiatives. To address conflicting policies between sectors, enabling conditions for PES initiatives should be evaluated through a cross-sectoral policies analysis, and policy harmonization across different sectors (such as forestry, agriculture, trade, conservation, finance and pricing) should be pursued. Hence, an integrated assessment of policies that impact natural resources is required, also to link private actions to a coherent policy framework.
PES and subsidies. PES should be evaluated against the overall scenario of existing subsidies affecting natural resources management in the food and agriculture sector. At one extreme, there are perverse incentives and, at the other end, there are environmental taxes, trade rights and quotas, and agri-environmental subsidies. A priority is to abolish perverse incentives and transform them into additional financial resources for the protection and restoration of ecosystem services.
PES as a catalyst tool for the green economy. PES can be considered a catalyst for the development of the “green economy” as it functions to create new “green” markets, promotes environmental awareness, allows for better decision-making within communities, encourages stakeholders’ participation, supports sustainable development practices, and aims to offer adequate compensation to farmers by recognizing their role in preserving and providing ecosystem services.
PES as a tool for sustainability. There was uncertainty from participants as to whether the three dimensions (ecological, economic and social) of sustainability could be effectively addressed through PES implementation, or if trying to achieve them implies stretching the PES tool beyond its capabilities. The potential of PES to fit into such a sustainability framework remains an open question that needs additional research and testing.