REALISTIC: Effective

BMP Sediment yield reduction (%)

Reduction in surface runoff (%)

Increase in base flow (%)

Contour farming with trees

49 16 8

Grass filter strips 38 - -

Grass waterway 41 - -

Terraces 85 22 10

Soil and water conservation practices have little effect on water yield, but significant effect on sediment yield

Hydrological modelling results from Sasumua

Business case for PWSGrassed waterway in Sasumua (3m width by 20 km length - approx 15 acres)

Benefit to Nairobi City Water and Sewerage Cooperation

20% less sediment yield into Sasumua dam: ≡ cost alum

Cost to 500 households

Year 1:

•Land Annual lease•Labour and grass

Year 2 onwards:

•Land Annual lease•Labour maintenance•Opportunity cost (18% on investment)

Net annual saving Year 4 onwards: Net annual earning per household:

566.4

2,000,000

1,725,000 1,725,000

283,200283,200

1,716,800

(Values in Kenya Shillings)

Ulugurus Mts, Tanzania

Increasing value accruing to farmers1. Alternative payment mechanisms

- UlugurusCo-investment e.g., improvement of village infrastructure - preferredGroup payments – not likely to be successful

2. Exploiting other income flows from sustainable watershed management:Carbon:

Albertine Rift: 17 farmers in River Mubuku watershed getting paid for 5735.88 tCO2

Usambaras: REDD feasibility studies

Eco-certification of crafts and honey in Albertine Rift

Biodiversity: Fouta Djallon- UNDP co-financing

Sediment sources in Sasumua

Low erosion rates from the forest

High rates on some agricultural areas, exceeding 11.2 tons/ha per year

Reducing costs: targeting hotspots

Western Usambaras, Tanzania

CONDITIONALITYIf performance will not happen

without incentives

Kick-started farmers are willing to maintain interventions (performance) even without payments

• Ulugurus: Prototype payments, one year• Upper Tana:

– UTZ coffee certification, 9 years– Rainforest Alliance tea certification

Risk of Crowding out effect - Usambaras

If payments will not happen without performance

Not yet investigated, but our theories are:

Short run: Buyers are likely to pay (for effort) based on trust – CSRLong run: Buyers are more likely to pay based on rigorous proof

VOLUNTARYCan buyers and sellers get into mutually beneficial agreements?

Farmers mostly willing to accept (WTA) payments for:

• enhancing water quality• Via agroforestry and other soil and

water conservation actions

Farmers may underestimate their opportunity costs (e.g., Kapingazi study): $93/ha/y compared to model estimate of $232/ha/y

Households not WTA (Ulugurus): •male-headed•located in the main villages•With fewer members•with less livestock assets

WTP:Sasumua:

Nairobi water users - 2o beneficiaries• Willing to pay higher water tariffs

• Interested in increased and regular flow

Nairobi Water and Sewerage Cooperation - 1o beneficiary

•Burdened with multiple levies

•Not authorised to increase water tariffs

•Governance - Inadequate management

•Poor infrastructure

Summary

Principle So far Pending

REALISTIC

Effectiveness Attributing improved water quality to contour farming, terraces, grass strips - GIS and hydrological modeling

Field testing - Sasumua

Efficiency Spatial targeting – hotspots

Quantifying cost reduction and impact

Affordability Business case – one site •Replication – water prototype payments in Guinea

•Conditions for RES business case

•Estimate other ES values and how they can be developed - Biodiversity prototype, GuineaREDD+ feasibility, Usambaras

Principle So far Pending

VOLUNTARY WTA – households with medium level assets

Understanding opportunity costs for watershed services

Conditions for reward mechanisms – CES, CIS, COS

WTP - Private sector participation elusive

Negotiation private and public sectorAnalysing RES readinessMatching demand and supply

CONDITIONAL Start-up costsPerformance focus

Understand role of trust/proof in RES.Equity issues

PROPOOR RES-tricky when dealing with very poor hh

Investigating mechanisms that make RES pro-poor

Summary

CONCLUSIONS

YES! RES can contribute to rural incomes in upstream areas that provide ES if the scheme

1. involves upstream providers who have low population density and /or a small area relative to downstream beneficiaries;

2. downstream beneficiaries have relatively higher income than upstream providers; high willingness and ability to pay.

3. provides highly critical and non-substitutable environmental services that are substantial and worth paying;

4. is efficient and has low opportunity and transaction costs

YES, RES can be pro-poor if• people’s perspectives on factors contributing to poverty is properly

assessed portray social, economic and institutional dimensions of poverty

• rewards match people’s needs and expectations• there is recognition and respect of choice by local people

Human capital, social capital and physical capital (non-financial incentives) – are often the most preferred and possible types of rewards

Higher levels of social cohesion and trust within the community and its external linkages lower transaction costs.

Can P/RES schemes be

pro-poor and provide

additional income ?

Leimona Beria

WHAT IS THE RIGHT LANGUAGE?

PAYMENT OR CO-INVESTMENT FOR ES?

van Noordwijk and Leimona (2010)

A strict interpretation of realistic, conditional and voluntary PES (or commoditized ES) appeared problematic in most situations.Monetary incentives may be counterproductive for public pro-social activities, since it can undermine existing norms not sufficient and/or durable

enough to offset the loss of intrinsic motivation.

Replacing the “payment” concept by “co-investment” language appeals to both social and financial concepts.

WHAT DOES A CO-INVESTMENT AND SHARED RESPONSIBILITY ENTAIL?

van Noordwijk and Leimona (2010)

“co-investmentco-investment” and “shared shared responsibilityresponsibility” is conducive to the type of

respect, mutual accountability and

commitment to sustainable development with

reference to social exchange rather than financial transactions.

An evolutionary process …. An evolutionary process …. After creating a basis of respect and relationships through the paradigm of CIS there may be more space for specific follow-ups in the paradigm of CES for actual delivery of ES to meet conservation objectives.

REFLECTIONS ON VALUE OF IFAD INVESTMENTS INTO RUPES AND PRESAGenerating evidence, often less funded by development donors enabled shared and greater understanding of differences in stakeholders’ knowledge, preferences and aspirations—aligned to IFAD’s multi-stakeholder approach and informed decision-making.

Transforming local people (with biophysical proof) from being passive recipients/beneficiaries of interventions, to providers of services, raising their profile in the playing field---aligned to IFAD’s pro-poor objective, through recognition of, and giving voice to poor, marginalized groups, including indigenous peoples.

Alternative pathway for securing access to land by poor people with ‘conditional tenure’ as reward for provision of environmental services----aligned to IFAD’s pro-poor objective through improved access to land.

Alternative route to community/rural development----aligned to principles of adaptive empowerment and rural development

Incentivising interventions in a negotiated way, promoted ownership----aligned to principles of equity, shared responsibility and ownership.

Support to national policy process—aligned to IFAD’s relations with national programs