FRR: A Division of theIDLgroup

Payments for ecosystem services and redd

It is well known that sustainable forest management (SFM) is difficult to achieve in tropical countries in the face of harsh economic and political constraints – due to a range of market, policy and governance failures, trees are more valuable felled than standing. One of the most promising avenues to promote SFM is through Payments for Ecosystem Services (PES), since this tackles the ‘market failure’ problem for forests – i.e. the lack of or weak markets for the environmental services of forests, related primarily to carbon, water and biodiversity benefits.  At the same time there are major challenges in the design and implementation of successful PES projects, especially for forest-based communities. These include high transaction costs; for water PES ‘deals’, showing the links between forest management and improved water quantity or quality; getting people to pay for ecosystem services; and the immense technical and political challenges surrounding introduction of Reduced Emissions from Deforestation and forest Degradation or REDD (click here for a briefing paper on REDD) as a strategy for tackling climate change, as recommended by the 2006 Stern Review. Forest Trends, an NGO based in Washington D.C. is a global leader in PES. Since 2007 we have been collaborating closely with Forest Trends on a series of PES activities (see below) which especially aim to generate ‘win-win’ PES outcomes for forest-based communities.

Selected Experience:

  • On-going support for development of the ‘Katoomba Ecosystem Services Incubator’ for provision of appropriate technical and financial support to community PES projects, especially in Central America and Uganda (for Forest Trends);
  • Development of methodological guidance for community PES project developers to undertake good practice social and environmental impact assessment (for Forest Trends);
  • Development of an action plan for implementing PES in Malawi based on an analysis of economic and financial incentives for SFM and conservation (FRR European Commission Framework Contract consultancy);
  • Coordination of country case studies in Uganda and Peru identifying a ‘Portfolio Approach’ to forest financing and incentives, presented at UNFF meeting ‘Financing for Sustainable Forest Management. An International Dialogue,’ Suriname, 8-12 September 2008 (for Forest Trends);
  • Paper on PES potential in Africa presented at the Forest Investment Forum for Central and West Africa, Accra 28-30 August 2007 (for the International Tropical Timber Organisation)
  • Overseas Development Institute Forestry Briefing Paper 16: ‘Potential and Challenges of Payments for Ecosystem Services from Tropical Forests’
  • Analysis of REDD and other ‘carbon finance’ options as part of a review of forest carbon finance for the Commonwealth Secretariat, London and presented at the Commonwealth Consultative Group on Environment (Commonwealth Environment Ministers), Monaco, 20 February 2008 (see the paper by Dr. Michael Richards "REDD: the last chance for tropical forests?")
  • Facilitation of dialogue on the design of REDD Readiness activities in Tanzania, incorporated into the East and Southern African Katoomba Group Meeting, 16-20 September, 2008 (for Forest Trends)
  • Scoping paper on ‘Climate Change Adaptation and Forest Communities’ for World Bank PROFOR (for Forest Trends).