The allure of win-win: can money buy environmental services?

BOGOR, Indonesia (10 July 2012)_Payments for environmental services (PES) approaches have been embraced enthusiastically worldwide because of their perceived win-win potential for both economy and environment. But scientists said in a recent review that a lack of proper evaluation in PES approaches means to what extent they actually result in a better environment is anyone’s guess.

“This is not just true for PES, but also for most other environmental policy tools: what works and what doesn’t remains cloudy. We still do not have many hard facts to fully understand the conditions in which different interventions have positive environmental and socioeconomic impacts,” explained Sven Wunder, Principal Economist with the Center for International Forestry Research (CIFOR), a co-author of the review.

The idea behind payments for environmental services schemes is to attach tangible value to functions of natural resources that are normally taken for granted. Landowners are paid to protect ecosystems that provide goods and services, such as forests that reduce erosion, filter water, and harbour biodiversity. There are already over 300 such programmes worldwide.

Their dual focus on economy and environment means PES schemes could play a key role in building green economies, a topic that topped the Rio+20 conference agenda in June 2012. The problem, according to the scientists’ review, is that PES schemes consistently lack the comprehensive evaluation that would allow scientists to say for sure to what extent the money put into PES approaches actually improves the environment.

“Evaluating how much difference the money paid in these schemes really makes still lags behind theory, policy design and implementation — and far behind equivalent evaluation practices in sectors such as health and education,” said Wunder.

Anecdotal evidence for whether and how PES protects ecosystems abounds, as in the testimonies from community members at Rio+20, quoted in The Guardian’s recent article on Costa Rica’s national PES scheme. But case studies, narratives and anecdotes do not give the hard numbers policymakers need before investing in PES approaches on a grander scale.

And, according to Wunder, a continuing lack of monitoring and evaluation mechanisms being built into PES schemes suggests that there will also not be much hard evidence as to the benefit of PES over no PES in the near future.

“We need more payment schemes and conservation interventions that are designed at the outset with the intention of evaluating their effectiveness, to evaluate with greater clarity how well the PES ‘treatment’ is working in different settings, so we can know for sure when and how much these investments are actually helping conservation.

“A few PES interventions have been designed in this way [Costa Rica’s rigorous evaluations are noteworthy], but to be sure of results, many more are needed.”

The concerns raised by Wunder and his co-authors ring true in Vietnam, which is the first country in Asia to have legalised PES and to have mainstreamed it into national forestry policy.

“One of the serious limitations is that people are paid to protect the forest, but it doesn’t really matter whether or not they really protect it — they still receive the money,” said CIFOR scientist Pham Thu Thuy in a Q&A with blogger Leony Aurora. Thu Thuy co-authored a recent paper on the prospects for PES in Vietnam.

“There is no monitoring or assessment of whether there is actually improvement in terms of the performance of environmental services.”

Fortunately, Wunder finds reason to hope that the mechanism known as REDD+ (reducing emissions from deforestation and forest degradation) might replicate PES mechanisms on the ground with more attention to monitoring and evaluation needs.

To a certain degree, REDD+ can be seen as a kind of international PES, with landowners, communities and countries being paid to reduce forestry greenhouse gas emissions, and to maintain the ecosystem services that forests provide.

The difference is that in most REDD+ proposals, payments are allegedly only made if there are improvements relative to a historical or predicted deforestation baseline – meaning also that monitoring and evaluation are vital for recipients to gauge the returns.

“REDD+ is going to be strictly performance-based,” explained Thu Thuy. “And so it must learn from PES how to set up an accountable monitoring system to ensure that environmental services are delivered.”

CIFOR scientists are already taking such an explicit evaluation approach to REDD+ projects in the Global Comparative Study on REDD+; some results from their analyses were recently published in Analysing REDD+: Challenges and choices, which was launched at an official side event during Rio+20.

“The evaluation techniques we can use surely also have some limitations, but applying them to measure the genuine effect of interventions such as REDD+ and PES is still far better than letting the schemes go unevaluated,” said Wunder.

“If more PES programs were designed at the outset with the intention of evaluating their effectiveness, it would help fill the large gap in our knowledge about effective conservation investments, including those related to realising REDD’s potential.”

Anecdotal evidence: A PES pilot community from Ot Noi village in Vietnam’s Son La province controls 206 hectares of forest, and in 2009 received 38 million VND of PES money. They used the money to build a community hall. PES community member Ca Thi Chin (pictured in red) described how they protect their forest: “We organise patrolling on a weekly basis – two men going together. If they find violators, they call the whole village. If the whole village comes, the violators will be afraid and stop cutting down trees and won’t come back. We had some patrolling before [PES started], but not systematically like now”. Photo courtesy of Leony Aurora.