Social equity matters in Payments for Ecosystem Services

Unai Pascualunai.pascual@BC3research.org

Equity, Justice and Well-being in Ecosystem Governance IIED, March 26-27th, 2015

outline

Why does equity matters in PES? Can auctions based PES be equitable and cost-

effective?

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Equity in PES, REDD+… matters

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Environmental governance must account for landscapes of institutional conflicts (confronted values and interests), also in PES.

Widespread concern that PES programs are likely to change/reinforce existing power structures and inequalities in access to resources

PES typically envisioned und under an aura of economic efficiency

Growing body of evidence suggests that equity considerations should be integrated into PES. But the debate remains hot.

• E.g., if equity not accounted for properly, PES may crowd out intrinsic motivations for conservation

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Multiple dimensions of equity

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Economic efficiency of PES is rarely evaluated as it requires diverse

valuation$

cost-effective targeting approach & min. transaction costs

if there exist legitimacy and developmental concerns, then negotiated re-targeting occurs

muddling cost effectiveness & equity criteria tends to be the norm in public PES.

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Fairness criteria: equity vs efficiency concerns in PES

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Egalitarian

Compensation/opportunity cost

Maxi-min

Expected provisionStatus quo

PES design favoring efficiency concerns

PES design favoring distributional equity concerns

Pascual et al 2010, Ecological Economics

Some argue that environmental goals must not be conflated with social objectives At most conservation schemes should either adopt:

A ‘do not harm’ approach that seeks to attain conservation without worsening equity (safeguards approach) or/and

externalise equity considerations to be addressed through separate policy instruments (one goal, one policy instrument) (Kingzig et al 2011)

Others argue that interdependencies exist between economic efficiency and social equity in PES

• 1. PES creates equity impacts which can feedback into env. outcomes.• Equity blind PES is more likely to create negative feedbacks that would

require ex-post enforcement, mitigation and compensation. increased operational costs. Erode sought after efficiency Undermine the robustness/sustainability of PES

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Equity as instrumental to conservation

Pascual et al (2014), BioScience 9

Examples (positive feedbacks)

Greater autonomy over monitoring and enforcement enhances project legitimacy (Kanowski et al., 2011), stronger accountability and improved compliance

Deliberative conflict management strategies improve ecological outcomes (Redpath et al., 2013; Raymond et al. 2013)

Respecting local perceptions of fairness linked to greater scheme credibility and effectiveness, sometimes more important to scheme success than the amount paid (Gross-Camp et al., 2012)

Rule-breaking (inc. corruption and manipulation of conservation rules), sabotage and protest (Brockington and Igoe, 2006),

Cancellation of PES contracts (Ibarra et al. 2011), Delayed project implementation, required mitigation, and local resistance

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Examples (negative feedbacks)

Can auction-based PES be fair?

Agrobiodiversity conservation auctions in 2010 based on farmer groups in Bolivia (18) and Peru (20)

Bids ranked based on effectiveness in terms of (i) conservation area, (ii) number of farmers and (iii) number of groups (40-40-20 weighs)

8000 US$ Budget Discriminatory vs. Uniform payment

rules In kind rewards (e.g., productive

assets) Monitoring ex post.

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In Bolivia (12 groups) 55 bids and in Peru (13 groups) 45 bids were received given 5 priority landraces to be conserved

relatively poorer farmers (richer) in Bolivia (Peru) were among those selected for payments

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Bolivia(discriminatory)

13 ha 8 ha 8 ha

Gini: 0.4 Gini: 0.6 Gini: 0.7

Peru(conditional)

1 ha 1 ha 1 ha

Gini: 0.6 Gini: 0.6 Gini: 0.6

Some concluding remarks about rescuing equity in PES

Equity blind PES schemes run the risk of failure as a result of applying single-objective tools to complex social ecological phenomena

Beyond moral arguments, the available evidence suggests that equity matters for ecological effectiveness.

Need to capitalize on positive equity feedbacks to achieve more robust outcomes that can be sustained over time.

Research priority: We need to move from individual case studies to a systematic data mining or meta-analysis of equity risk/opportunities on cost-effectiveness in PES schemes

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Some recent research papers

Pascual, U., Phelps, J., Garmendia, E., Brown, K., Corbera, E., Martin, A., Gomez-Baggethun, E., Muradian, R. (2014). Social Equity matters in Payments for Ecosystem Services. Bioscience64(11): 1027-1036

Narloch, U., Pascual, U., Drucker, (2013). How to achieve fairness in payments for ecosystem services? Empirical insights from agrobiodiversity conservation auctions. Land Use Policy 35: 107-118.

Garmendia, E. and Pascual, U. (2013) A justice critique of environmental valuation for ecosystem governance. Chapter 8 in Sikor, T. “Justices and Injustices of Ecosystem Services” Routledge. London, UK

Corbera, E., and Pascual, U., (2012). Ecosystem services: heed social goals, Science, 335(6069):655-656.

Narloch, U., Pascual, U., Drucker, A.G. (2011) Cost-effectiveness targeting under multiple conservation goals and equity considerations in the Andes. Environmental Conservation. 38(4): 417-425

Pascual, U., Muradian, R., Rodríguez, L.C, Duraiappah, A. (2010) Exploring the links between equity and efficiency in payments for environmental services: a conceptual approach. Ecological Economics. 69(6):1237-1244.

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Thank you

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