Forests Sourcebook - HCV Resource Network

Table 2.2
World Bank Projects with Explicit PES Components
Total cost World Bank loan GEF grant
Country, project (US$ million) Main features
Completed projects
Costa Rica: Ecomarkets 49.2 32.6 8.0 Effective 2001–05. Supported the country’s
PSA program.
Projects under implementation
Colombia/Costa Rica/Nicaragua: 8.45 — 4.5 Effective 2002. Piloting the use of PES to
Regional Integrated Silvopastoral
encourage adoption of silvopastoral
Ecosystem Management
practices.
South Africa/Lesotho: Maloti-Drakensberg 33.1 — 15.2 Effective 2003 (separate but coordinated
Transfrontier Conservation and Development
projects). Includes a PES pilot.
South Africa: Cape Action Plan for the 49.6 — 9.0 Effective 2004. Uses PES to encourage
Environment (CAPE)
conservation in the Cape Floristic Region.
Mexico: Environmental Services 156.6 45.0 10.0 Effective 2006.Will consolidate and ensure
long-term financial sustainability of
country’s PES program.
Costa Rica: Mainstreaming Market-based 90.3 30.0 10.0 Approved 2006.Will consolidate and ensure
Instruments for Environmental Management
long-term financial sustainability of
country’s PES program.
Kenya: Natural Resources Management 78.0 68.5 — Approved 2007.Will explore the potential
for PES mechanisms to contribute to
improved water and forest resource
management.
Projects under preparation
Brazil: Espirito Santo Biodiversity and 12.5 — 4.2 Will use PES as part of package of
Watershed Conservation and Restoration Project
measures to improve watershed
management.
Kenya: Agricultural Productivity and Sustainable 12.4 — 10.0 Will pilot use of PES for watershed
Land Management
protection.
Panama: Rural Poverty and Natural Resource 50.0 36.4 6.0 Will include pilot PES program for local
Management II
communities and specific watersheds.
República Bolivariana de Venezuela: 24.5 — 6.0 Will develop PES mechanism with
Canaima National Park
hydropower producer to protect Río
Caroni watershed.
Sources: Pagiola 2006.
Note: — = Not available. Projects noted as under preparation if PCN has been approved; other projects are in identification.
Amounts shown for projects under preparation are preliminary and subject to change; for projects with PES components, amounts reflect overall
project costs, not PES-specific costs.
Hydrological services. While forests are widely believed to
provide a variety of hydrological services, the evidence is often
far from clear (see box 2.13). This partly reflects the diversity
of conditions encountered: hydrological services, for example,
depend on the rainfall regime, on the type of soil, and on
topography. Deforestation and afforestation can have
multiple, often contradictory impacts, making the net impact
on water services hard to determine. For example, infiltration
can be reduced, but water use can also be reduced through
evapotranspiration. The net impact of these changes (both in
total and within a year) depends on the balance between these
effects. Moreover, much depends on post-logging land use.
The objectives also influence the analysis: Efforts to regulate
waterflows to avoid flooding and dry season deficits may
require different interventions than efforts to maximize total
water volume, and the measures required to conserve
biodiversity may be different from either. Moreover, even if the
kind of benefit that a forest generates is known, one must also
know how much of that benefit is being generated.
Maintaining or regenerating forest cover imposes opportunity
costs from the forgone land use and may also impose direct
costs (for example, for reforestation). Without estimates of the
amounts of benefits that would be generated, determining
whether these costs are worth bearing is difficult.
Biodiversity conservation. Although in some ways
biodiversity is much harder to measure than water services,
adequate indicators can be developed relatively easily in
practice. These can include, for example, counts of the
number of species of conservation interest, or of species
that are particularly sensitive to ecosystem conditions, and
of the number of individuals within these species.
NOTE 2.3: INNOVATIVE MARKETING ARRANGEMENTS: PAYMENTS FOR ENVIRONMENTAL SERVICES 87