Ecobank Malawi Limited recently pledged its continued support to projects aimed at combating the effects of climate change.

The pledge was made at Ntchisi, a district in central Malawi, as the bank made the last payment of a 3 year carbon sequestration tree planting project worth $7,500. The project is implemented by the World Agroforestry Centre (ICRAF) in cooperation with the Sustainability Science Programme at Harvard University.

From Ecobank supports tree farming in Malawi

Speaking on behalf of the bank, Ecobank Malawi’s Doreen Matonga said the bank was impressed with the level of effort displayed by the farmers in Ntchisi. She commended the people of Joni and surrounding villages for ensuring that the trees survived at a time when effects of climate change have hit the district hard. She therefore pledged the bank’s commitment, through its corporate social responsibility programme, to sustainable projects that will bring about positive change.

Speaking earlier, the project’s principle researcher, Kelsey Jack, applauded the people of Ntchisi for ensuring that the tree survival rate is more that 90%. She called on the people in the project to ensure that they also pass on information to other farmers so that the project can make a difference.

District Commissioner for Ntchisi, Alex Mdooko, called on the people to continue taking care of the trees even after the lapse of the tree planting contract.

ICRAF’s representative at the function, Tracy Beedy, praised the project saying that this was the first time that the organization has done a cash-sponsored tree planting project [in Malawi]. She indicated that ICRAF would emulate it in other countries as the results were impressive.

The tree planting project was aimed at promoting M’mbawa trees as a source of carbon sequestration and long-term development. Over 170 farmers participated in the programme in which they were paid for each surviving tree.

Previous articles on the Ntchisi tree planting project

Malawi small holder farmers at frontline in fighting greenhouse gas emissions (January 2011)

Ecobank funding farmers in Malawi carbon project (January 2010)

Payments for trees: useful lessons from Malawi (June 2009)

Editors: Steve Zwick, Tommie Herbert, and Anne Thiel

This booklet, Creating New Values for Africa: Emerging Ecosystem Service Markets, contains 12 featured projects and initiatives which demonstrate the current innovations and challenges to carbon, water, biodiversity PES implementation in Africa. This publication, (coupled with training sessions, policy advice, legal analysis, and network building) will enable community leaders, government actors, NGO technical staff, project developers and other interested persons to gain access to PES best practice, build a local community of PES learning, craft policies that are supportive of PES, and design PES projects which provide lasting ecosystem services and livelihood benefits.

Download the booklet (PDF, 2.4MB)

Author: Slayde Hawkins – Forest Trends/Katoomba Incubator

This booklet offers an analytical framework for assessing legal and institutional readiness for PES transactions. It is divided into three segments based on timing and the order of addressing issues, with an eye to what will be most important to investors and buyers in payment for ecosystem services agreements. Specifically, the first level of preparing for PES agreements should be ensuring that fundamental or threshold conditions are in place for buyers to feel that there is sufficient stability in place to consider such a business arrangement. The second level of preparedness, while important for well-functioning PES, may be developed adaptively as needs and options become clearer via a PES experience on the ground. Finally, level three includes non-urgent aspects that may be important to streamline or scale up PES, depending on the particular circumstances.

Download the booklet (PDF, 1MB)

Supporting communities that live in watershed areas is therefore critical to ensuring the continued flow of fresh water to cities, farms and industry. Kenya’s water policy is however silent on how users of water can pay or otherwise compensate watershed communities for land use practices that reduce soil erosion while improving the flow of water.

This means that Kenya’s water service providers do not have guidelines on how to engage in payments for environmental services (PES). Indeed, for the most part, they are not sure whether engaging in PES is legal!

A new policy brief by the PRESA project discusses these issues, and presents four recommendations for policy and institutional changes that could make it possible to compensate communities for watershed services.

The policy brief titled, ‘Institutional and policy requirements for payments for watershed services in Kenya,’ is based on PRESA’s research at Sasumua, in the central highlands of Kenya.

A colonial-era water reservoir at Sasumua supplies 20% of the water consumed in the nation’s capital, Nairobi. The bulk of water in the reservoir flows from intensively cultivated farmland.

Click here to download the policy brief (PDF, 500KB)

Farmers worked together to build terracing and ridging in their coffee farms. PHOTO: Rachman Pasha

Since 2002, RUPES has been working with communities, researchers and policy makers in China, India, Indonesia, Nepal, Philippines and Vietnam.

RUPES sees rewards for environmental services as an approach that can alleviate rural poverty while protecting the natural environment.

An example of RUPES’ work has just been featured in the New Agriculturist magazine. The article describes how RUPES helped coffee farmers at the island of Sumatra get conditional land tenure. In exchange, the farmers are expected to practice soil and water conservation measures that ensure that soil sediments do not clog a local hydroelectric dam.

“We are very happy with this scheme because it gave us a legal certainty in managing our land as well as providing us with additional income from the fruit trees,” enthuses Eddy Purwanto, a community group member.

You can read the article by clicking here.

The global demand for food is growing faster than supply and has led to a land crisis that puts forests on the frontline of agricultural expansion. The crisis concerns proponents of rural poverty alleviation, food security, forestry, agriculture, water security, and biodiversity alike.

“What’s missing is a shared agenda of change. REDD is an example of how something arises to fix one aspect of the land crisis, while other groups don’t see their agenda addressed. Maybe that’s a mistake we made with REDD, we defined the agenda too narrowly,” said Nepstad in conversation with Center for International Forestry Research scientist Christine Padoch.

The UNFCCC Conference of Parties is developing REDD, a funding mechanism for keeping carbon in forests, as a way to address climate change. In the scheme, developed countries pay developing countries to reduce their greenhouse gas emissions from deforestation and forest degradation.

For more on this story, please click here.

PRESA researchers at Kapingazi during the survey.

That much is already known.

Little is known about landholder attitudes and preferences related to alternative land management schemes. Which practices do landholders prefer, and why? How much of their land can they set aside in a payments for environmental services (PES) scheme?

A recently published journal paper describes how researchers have adopted market research techniques to answer these questions and more.

The paper, published in the Journal for Environmental Management, is titled “A conjoint analysis of landholder preferences for reward-based land-management contracts in Kapingazi watershed, Eastern Mount Kenya.” It was written by Dr. Bedru Balana of the James Hutton Institute in the United Kingdom with Thomas Yatich and Miika Mäkelä, both formerly with the World Agroforestry Centre (ICRAF).

ICRAF is running a project known as Pro-poor Rewards for Environmental Services in Africa (PRESA) to support and facilitate reward mechanisms. PRESA is working in Guinea, Kenya, Uganda and Tanzania. One of its sites in Kenya is at the River Kapingazi watershed in the eastern Mount Kenya region. There, losses in forest cover, land use changes and unsustainable agricultural practices are causing surface run-off and soil erosion.

The Kapingazi River has a strong influence far downstream.“Kapingazi is a major tributary of the larger Rupingazi River, which in turn feeds into the Tana River, Kenya’s largest river. The Tana River powers a series of hydroelectric stations important for Kenya’s energy needs. The major problem at the Kapingazi watershed is siltation of streams which in turn affects downstream reservoirs, including those that generate hydroelectricity,” reads an excerpt from the paper.

The area surrounding the Kapingazi basin has a population density of 402 persons per square kilometre, which is higher than Kenya’s national average of 68 persons per square kilometre. As a result of high population pressure, the catchment is characterized by small landholdings and increasing agricultural intensification.

With landholders identified as the providers of watershed environmental services, PRESA carried out a survey in October 2009 to assess their preferences towards alternative land management schemes. Another important objective was to draw policy implications in designing reward-based local resource management schemes.

Focus group discussions and a conjoint survey were administered in 3 community groups, locally described as Focal Development Areas (FDAs). The FDAs were previously demarcated by the Mount Kenya East Pilot Project for Natural Resource Management (MKEPP), a state-run programme that promotes sustainable natural resource management within the Kapingazi watershed and the larger Upper Tana region. The FDAs selected for the study were Kiriari, Kairuri and Muthatari in the upper, central and lower part of the catchment respectively.

125 sampling points were generated using geo-spatial information systems (GIS) mapping techniques. Enumerators went into the household nearest to each sampling point.

The study used conjoint analysis to evaluate landholder preferences. Conjoint analysis has long been associated with research in marketing, psychology and transport, where it has been used to evaluate and understand consumer preference for products or services.

Results indicate that, as long as appropriate incentive schemes are put in place, the size of landholdings may not be a major constraint in implementing soil and water conservation and other environmental management programmes. Farmers could implement environmental management programmes despite having smallholdings, as is often the case in village economies of developing countries, where land degradation and fragmentation of landholdings increases over time.

People with prior experience of environmental management practices were twice as likely to adopt a given contract compared to those without such prior experience. Other characteristics that had significant effect on preferences included: gender, experience in environmental management practices, a high school education and the level of household from agricultural sources.

The probability of adopting a given land management scheme decreases for schemes that require the commitment of larger land areas, longer contract periods, and greater restriction of harvest rights.

The incidence of poverty, population pressure and lack of alternative energy sources were identified as the underlying drivers of local environmental problems. The authors of the study recommend that concerned governmental and non-governmental agencies taking part in environmental management activities in the Kapingazi Basin focus on ways of easing these problems, and integrate environmental objectives with local developmental concern. “Investment in technologically and economically feasible sources of rural energy would make alternative energy sources available and could play an important role in mitigating forest degradation.”

Another recommendation is that stakeholders, such as farmers and local leaders, government units and intermediary players (for example PRESA), need to be fully engaged in the design and implementation processes of reward schemes. As long as such schemes are designed in a participatory environment and appropriate incentive mechanisms are put in place, environmental management programmes could be realized despite small landholdings.

To read the paper, please visit the Journal of Environmental Management by clicking here.

A meeting at Sasumua where PRESA met the Sasumua Water Resource User Association and the Water Resources Management Authority.

Nowhere is this interest more apparent than at the Sasumua catchment area in Kenya, which alone is responsible for 20% of the fresh water supplied to the capital city, Nairobi. Water from the catchment collects at the Sasumua reservoir, from where it is piped almost 100 kilometres to Nairobi in the south.

At least half of the Sasumua catchment area is under cultivation, hosting a high population growing at 3.5% annually. The average farm size is 2.86 acres. Polluted runoff from small towns and farms results in high rates of sedimentation, high bacterial count and high water treatment costs. The major pollutants are biological and soil materials from agricultural fields, bacteria from human and animal waste, and metallic content from roads and garages.

Since 2008, the Pro-poor Rewards for Environmental Services in Africa project (PRESA) has been conducting research into possible payments for environmental services (PES) at Sasumua. PRESA is facilitating dialogue between the Sasumua catchment community, who are potential environmental service sellers and the Nairobi Water Company, which is the most likely buyer.

Research shows that certain interventions, such as grassed waterways and desilting of small upstream dams, can reduce sediments, thereby improving the quality of water flowing into the Sasumua reservoir. Implementing these measures is costly to farmers but, in a PES scheme, the water company could compensate communities for land use measures that reduce sedimentation. With reduced sedimentation, the water company could incur lower water treatment costs. The savings gained could be the source of funds to compensate farmers.

All this seems very straightforward, at least on paper. However, discussion with representatives of government institutions regulating the water sector indicates that implementing a PES scheme for watershed services in Kenya faces several policy hurdles.

For starters, Kenya’s environment policies do not specifically mention PES in natural resource management. This creates a policy limbo as regulators and potential private-sector buyers are not sure about getting involved in PES schemes. Besides, public institutions funded by taxpayers cannot appear to be compensating farmers only in one part of the country, but must replicate the same in all watersheds.

Kenya’s new constitution promulgated in August 2010 makes several changes in natural resource management, by delegating some responsibilities from the central government to new counties. The responsibility for watershed management could likewise be affected. In the latest meeting of Sasumua stakeholders held in September 2011, PRESA was advised to lobby for the inclusion of PES into the National Water Resources Management Strategy.

Other relevant policies that could be of interest to PRESA include the Landuse policy, the Irrigation Policy, the Water Policy, the Land Reclamation Policy, Forest Act, Agriculture Act and the Environment Management and Coordination Act.

Many of the policy makers that PRESA has met at its stakeholder forums in Kenya have expressed positive views on the potential of PES to address environmental sustainability and rural livelihoods. It is generally agreed that the fate of the environment lies at the hands of small holder farmers. With time, and when accommodated in environment policies, PES schemes will begin getting implemented across the country.

Both the academic and the policy debate associate REDD primarily with “positive incentives” in the form of compensatory mechanisms. The simple idea is that farmers will stop slashing forests if they were offered incentives conditional on conservation targets (“carrots”).

The more complex reality, however, is that direct compensation payments can only work where rights to land are clearly defined and effectively controlled. Even in leading REDD candidate countries, such as Brazil, insecure tenure and irregularities prevail in much of the forest land under pressure. Moreover most REDD candidate countries have readily applicable environmental legislation that could reduce the lion’s share of deforestation if effectively enforced.

Command-and-Control (C&C) instruments (“sticks”) are often dismissed as inherently ineffective, but recent experiences in Brazil have shown that regulatory mechanisms combined with political will can make an astonishing difference at fairly low additional implementation costs.

Annual deforestation in the Brazilian Amazon has experienced an unusually sharp drop since it peaked at over 27,000 square kilometers in 2004 – among other reasons, doubtless due to more effective law enforcement. Implementing REDD+ through C&C, would leave the major share of total emission abatement costs – opportunity costs – with land users. This can be convenient from the perspective of public budget planners, especially if C&C comes with fine revenues. Hence, why would REDD recipient countries opt for expensive carrots with limited scope for application if they have handy and less budget intensive C&C measures right at their disposal?

Click here to find out more.

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“For a start, the science to consistently translate forest ecosystem services into tradable commodities is inadequate,” said Erik Meijaard, lead author of Ecosystem Services Certification: Opportunities and Constraints.

“Answers to questions such as “how much carbon is stored in your forest?” are needed for trade, however co-objectives related to social and ecological aspects of forest management also need to be met which complicates their certification, for example, “are certified forests also good for wildlife?” or “are local communities being sufficiently involved in decision making?” said Meijaard.

Humans benefit from goods (such as clean drinking water) and services (e.g. pollination of crops and natural vegetation) supplied by our natural ecosystems. These benefits, known as ecosystem services, were defined by the United Nations in a global four-year study culminating in the creation of the 2004 Millennium Ecosystem Assessment.

However, as human populations grow, so too does the demand on goods and services provided by natural ecosystems and many ecosystem services are now being assigned economic value in order to shift ecosystem management in a more socially and environmentally responsible direction.

Independent certification body, The Forest Stewardship Council, is currently in the process of developing certification systems for ecosystem services, to ensure that they conform with social and environmental requirements such as respecting indigenous people’s rights and protecting endangered species.

For more on this story, please click here.

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Participants to the workshop on PES and REDD in August 2011.

Payments for environmental services bring together communities, governments and industry into beneficial relationships that try to resolve conflict over access to environmental services. Getting these stakeholders to work together is not easy as each group is primarily looking out for its own interests. As the environment faces increasing pressure to meet demand for food, water and land, the ecological system that sustains life on earth is threatened and these groups should find ways to begin working together to stop and reverse the trend.

It is with this in mind that the Pro-poor Rewards for Environmental Services in Africa (PRESA) project of the World Agroforestry Centre (ICRAF) held two workshops with over 30 representatives from government, community organizations, industry, NGOs and research organizations, to discuss effective approaches on Payments for Environmental Services (PES).

The workshops were held from 8 – 12 August in Nairobi, Kenya, with participants from Ethiopia, Guinea, Indonesia, Kenya, South Africa, Tanzania, Uganda and the United Kingdom.

The first of the workshops sought to increase understanding of the opportunities associated with payments for environmental services. Speakers highlighted how PES could act as an incentive for sustainable use of natural resources.

The second workshop was more technical. Participants learnt about the tools required to undertake social impact assessment (SIA) of carbon projects. The workshop was based on methodology tested and refined in Reducing Emission from Deforestation and forest Degradation (REDD+) applications in Brazil, Guatemala and Peru, as well as earlier SIA training workshops in Peru and Tanzania in 2010.

At the workshops, different types of PES schemes were discussed. “Through PES, communities can access funds that previously were not accessible to them, for example, through private sector investment in environmental services,” explained Dr. Sara Namirembe of the World Agroforestry Centre (ICRAF).

As a market-based mechanism, PES must have sellers, buyers and intermediaries (those who link sellers and buyers). Environmental service sellers are land managers who conserve or enhance a clearly defined ecological benefit. Buyers or beneficiaries are a well defined group of people for whom a particular ecological benefit is of great importance.

The biggest test when setting up a PES scheme lies in getting buyers. Potential buyers should first be convinced of the benefits of paying for environmental services. Private companies may object to spending money on what they consider a non-profitable activity. “Markets may not be able to pay for all public goods,” says Dr Michael Richards, who has published guide books on PES. However, the alternative to not ensuring environmental sustainability could be a decline in environmental services in the long term.

“Potential buyers should understand and be confident about PES in order to create the necessary demand,” says Dr. Namirembe, “PES is about trade-offs, all parties gain something and also give up something else.”

Another difficulty with PES schemes is that there are usually more sellers than there are willing and available buyers. This creates uneven power relations as sellers can only get what buyers are willing to give. PES requires that funding is sustained, yet, even where buyers are available, long term funding is not guaranteed.

High investment costs

The costs of starting and running a PES project can be high. Regular monitoring of community members to ensure compliance is expensive. Since PES involves long term contracts, it may discriminate against those with weak tenure rights as buyers are usually interested in dealing with land owners or farmers with secure tenure. This creates the risk of leaving out the poor, who are more likely to lack formal land tenure.

Getting PES into national and regional policy

But the process can be made easier if PES was part of environmental policies and new links with relevant public institutions. For this to happen, researchers working on PES need to engage more with government and the private sector. Workshop participants advised PES researchers to influence environmental policy at regional cooperation bodies, such as the East African Community and similar organisations elsewhere in Africa.

The workshops included a discussion of case studies from the RUPES project in Asia (Rewarding the Upland Poor for Environmental Services). Beria Leimona from the World Agroforestry Centre office in Bogor, Indonesia, was in Nairobi to share PES experiences from RUPES sites.

Workshop presentations

Presentations can be downloaded from the internet through the following links:

Training Workshop on Payments for Ecosystem Services (PES) and Reduced Emissions from Deforestation and Degradation (REDD)

Training Workshop on the Social Impact Assessment of REDD+ Projects

Workshop report

The workshop report can be downloaded by clicking the following link: Report of the Training workshop held in August 2011 [PDF, 1.2MB]

Workshop photos

August 2011 workshops

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