CONSERVING BIODIVERSITY & DELIVERING ECOSYSTEM SERVICES

Payments for Ecosystem Services
Payment for Ecosystem Services (PES) is the term used to
describe an arrangement where a transaction occurs
through which beneficiaries of a service (or bundles of
services) buy from the providers of that service. People
who benefit from a service therefore compensate those
who provide it, giving them an incentive to manage land
and resources in a way that ensures its continued
provision. Although this concept is simple in theory,
establishing effective and equitable PES schemes is
difficult in practice, and there are relatively few local
examples. Some national PES schemes have been
established elsewhere, with varying levels of success.
Costa Rica provides one of the best known examples for
developing countries. Payments from the Government
are made to farmers who conserve forests on their land to
protect watersheds, biodiversity, carbon sequestration
and storage, and scenic landscape/tourism services.
Currently, PES schemes are often dependent on funding
from multilateral agencies (such as the World Bank and
Global Environmental Facility) though funds can also be
levied from national taxes or from private companies. For
example, there are many companies that sell carbon
credits to commercial and individual customers who are
interested in lowering their carbon footprint on a
voluntary basis. Increasingly, conservation is looking
towards businesses to provide the finance needed to
conserve biodiversity and ecosystem services due to their
high impact on the environment and dependency on it.
At the international level, some businesses and
Governments are becoming engaged in long-term,
sustainable financing for conservation through PES
schemes, such as the REDD+ mechanism (Reducing
Emissions from Deforestation and Forest Degradation)
currently in development.
Assessing services, such as the
carbon stored in Shivapuri
Nagarjun National Park, can
help to inform land management
that reflects the value of
natural capital (Hum Gurung)
National accounting systems
measure the economic
activity of a nation as an
indicator of progress. They
take account of physical and
financial capital as assets,
but generally overlook the
natural capital that our
environment provides.
Similarly, national accounts
fail to reflect social factors
such as income distribution
and poverty. However, there
is a growing awareness of
the importance and
relevance of including
ecosystem services in
decision-making, and a
move towards ‘green accounting’ which recognises the
economic value of nature by measuring ecosystem services
(such as clean water, clean air and greenhouse gas
sequestration), in addition to traditional measures of the
market value of a country’s goods and services. The concept
of a Green Economy, i.e. an economic model based on
sustainable development that takes account of the values of
natural resources, has the potential to result in policies that
improve human well-being and social equity, while
significantly reducing environmental risks and ecological
scarcities. This will only be achieved if there is investment to
maintain and enhance ecosystems; however, in some cases,
income can also be generated from the provision of
ecosystem services (see box).
Protected areas often provide important benefits for local people,
such as the community of Murma village near Rara National Park
who collect pine needles from the forest to combine with manure
to fertilise their fields. Without pine needles their crop yield
would decrease (David Thomas)