PRESA’s work on Payments for Environmental Services (PES) at the Sasumua watershed in Kenya has resulted in the inclusion of PES as an effective water resource management mechanism within key government policy on water.

Heavily sedimented water flowing into the Sasumua Dam. PHOTO: J. Mwangi

The Pro-poor rewards for environmental services in Africa (PRESA) project at the World Agroforestry Centre has been instrumental in providing evidence on the effectiveness of the PES initiative which aims at rewarding communities that protect essential environmental services. Read related article.

One of the project sites has been the Sasumua watershed in Kenya where evidence shows that building a grass waterway 20 kilometers long and 3 meters wide can reduce soil sedimentation by 20 percent. This amounts to savings of US$23,000 a year in purification costs for the Nairobi Water Company. However, such benefits cannot be realized due to existing policy and institutional gaps within the water sector. For example, community participation in water resource management is provided for through the Water Resource User’s Association (WRUAs) but it is not clear whether these communities, majority of who are small-scale farmers, should directly receive payments for improving watershed services.

To address such constraints, PRESA has been actively engaging key players in the water policy sector and the efforts culminated into the drafting of a policy position paper with recommendations on what needs to be included in the water management policies to activate the implementation of PES. These recommendations were taken up and are reflected in one of the key policy water documents soon to be released. Stay tuned for the link to the policy document. Notes from the policy position paper can be accessed here [PDF, 316KB].

Read more of PRESA’s PES work here: Pro-poor rewards for environmental services in Africa 2008-2011[PDF, 1.4MB].

This week the Ecoagriculture PES Newsletter has featured updates on payment for watershed services initiatives of PRESA’s research of the policy and institutional arrangements necessary to implement PES, and the PRESA policy brief outlining lessons learned.

Sasumua watershed. PHOTO: G. Kimega

“With about half of the Sasamua watershed under cultivation, and host to a growing population, the waterways have become polluted through runoff from farms and towns. The Nairobi Water Company already spends over US$200,000 per year on water filtration, and these costs are expected to increase in the coming years. Changing land management practices in the upper catchment has the potential to reduce sedimentation and pollution of waterways and thus the costs of filtration. This dynamic presents an opportunity for downstream water users to support the adoption of better land management practices by upstream farmers through a PES mechanism. To fully address this challenge, the case calls for full watershed scale planning and the coordination of a variety of stakeholders, including water users, farmers, water utility companies, and water resources management organizations. The Pro-poor Rewards for Environmental Services in Africa (PRESA) program of the World Agroforestry Centre (ICRAF) has been working in the watershed to research the policy and institutional arrangements necessary to implement PES, and has published a policy brief outlining lessons learned” reads the article.

The writer states that ‘the policy brief begins by introducing the policy and institutional framework already in place for watershed management, including fees extracted from water utilities and highland forest water users to go towards watershed conservation and Kenyan Water Resource Users’ Associations. The authors explore how a payment for ecosystem services program would augment the impacts of a larger catchment management strategy, and coordinate with the private and public sector actors’.

A related online resource is an e-newsletter on Payments for Ecosystem Services (PES) in East and Southern Africa created by Forest Trends, PRESA, the Katoomba Group, and UNDP to offer easy access to new developments on PES in Africa and around the world.

Last week, PRESA’s (Pro-poor Rewards for Environmental Services in Africa) work to give incentives to environmental stewards was awarded the title ‘Innovation of the Week’ by an article featured by the World Watch Institute and Huff Post Green. The article recognized PRESA’s initiative to reward farmers for providing ecosystem services through market-based approaches in eight sites in the highlands of East and West Africa.

‘The market-based system works by rewarding the individual or community that provides a certain environmental service. Building a grass waterway 20 kilometers long and 3 meters wide in the Sasumua watershed, for example, can reduce soil sedimentation by 20 percent. This amounts to savings of US$23,000 a year in purification costs for the Nairobi Water Company, which operates downstream and provides the city with clean water. The cost of maintaining the waterway is only US$3,000 a year for the 500 households involved, making it a win-win scenario for both farmers and urban residents,’ reads the article.

The writer concludes by noting that PRESA’s work in Africa shows that rewarding communities for environmental services can be a very effective way to support rural livelihoods while conserving the environment at the same time.

Details of how the project works in the other sites are documented in a recent publication on Pro-poor rewards for environmental services in Africa.

Related to this is a newly published journal article titled, Auction Design for the Private Provision of Public Goods in Developing Countries: Lessons from Payments for Environmental Services in Malawi and Indonesia. The article authorship is led by Oluyede Ajayi, a Senior Policy Scientist, Research & Development at ICRAF and Beria Leimona, Program Officer, ICRAF – RUPES (Rewards for Use of and Shared Investment in Pro-poor Environmental Services) research program. The article published in the journal World Development provides lessons on design of Payments for Environmental Services from ICRAF’s work in Malawi and Indonesia.

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.