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REWARDING BENEFITS THROUGH PAYMENTS AND MARKETS
Box 5.7: Large-scale PES to alleviate poverty and reduce deforestation in Ecuador
Ecuador has about 10 million hectares of native forest cover but its deforestation rate is one of the highest
in South America (around 200,000 hectares lost each year). This leads to emission of about 55
million tons of CO 2 and also entails a huge loss of ecosystem services and subsistence for local people.
In 2008, pursuant to its National Development Plan, the government of Ecuador designed and approved
the Programa Socio Bosque (Forest Partners Programme) to combine development and conservation
objectives and directly benefit poor farmers and indigenous communities. The mechanism consists of
a direct payment per hectare of native forest per year to landowners on condition that they
conserve (part of) their forest. Participation is voluntary and compliance will be monitored on a regular
basis through interpretation of satellite images and field visits. Specific programme goals over the first
six years are to:
• protect over 4 million hectares of forest to conserve globally important biodiversity, protect soils
and water and mitigate natural disasters;
• reduce greenhouse gas emissions from deforestation and forest degradation as an integral part
of the national REDD strategy (PES measures will be supported by stronger enforcement of
illegal logging and a national reforestation plan); and
• increase income and protect human capital in the poorest rural areas of the country with a total
number of beneficiaries of about 1 million people.
Criteria to prioritise areas for implementation are being finalised and may include: high deforestation
threat; high value for ecosystem services (carbon storage, water protection and biodiversity); and high
levels of poverty.
Progress to date: The first contracts were signed in December 2008, benefiting about 15,000 people
and covering 180,000 hectares of forest. In 2009, the scale of implementation increased: by May 2009,
another 8000 beneficiaries had been registered, representing an additional 140,000 hectares. A dedicated
trust fund has been established to assure long-term financial sustainability and transparent use
of resources. The government intends to complement its own resources with support from international
cooperation and through national and international PES schemes and carbon markets.
coverage), to implement PES in more countries, to
make PES more efficient and to address issues of permanence.
To date, however, not many PES schemes
have been effectively expanded.
PES involving the private sector offer the potential to
raise additional finance and thus complement public
conservation funding. As public and private PES
may operate differently, it is important to explore
the relative benefits of voluntary and regulatory
Sources: Marcela Aguiñaga*, Manuel Bravo*, Tannya Lozada*, Free de Koning** and Luis Suárez**
* Ministerio del Ambiente del Ecuador
** Conservación Internacional Ecuador
Background information available at: http://www.ambiente.gov.ec/contenido.php?cd=278
approaches. While private actors can play a role in
PES, the willingness to pay of existing beneficiaries is
often not sufficient to cover start-up or operating costs.
This may be due to ‘free rider’ problems or to a lack of
knowledge of the full benefits provided by ecosystems.
In such cases, governments may need to provide extra
incentives or find alternative solutions. One such solution
might be to make a scheme obligatory once a certain
percentage of beneficiaries agrees to it, mitigating
the free-rider problem.
TEEB FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 5: PAGE 16