5.3 Experiences with PES in Kenya

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1 5.3 Experiences with PES in Kenya JAMES G. KAIRO Introduction There is growing interest in market-based approaches worldwide. Equitable payments for ecosystem services (PES) such as carbon sequestration, watershed protection, landscape beauty and biodiversity conservation are emerging as a viable tool to protect and restore ecosystems by rewarding resource managers and land-owners for good land management practices. These CURRENT instruments can also provide significant incentives ATTEMPTS TO to restore degraded lands, shift to sustainable PROMOTE PES agriculture, and reward small-scale holders for good land management practices (WWF 2006). For instance, IN KENYA ARE emerging markets for carbon sequestration credits FACED WITH AN INADEQUATE through the Kyoto Protocol and the Clean Development POLICY FRAMEWORK AND WEAK Mechanism constitute an important international OR NONEXISTENT MARKETS FOR programme. According to World Bank estimates, the carbon market was worth more than 22 billion by 2007 ECOSYSTEM SERVICES ASSOCIATED (Wunder 2007). WITH CARBON, WATER AND BIODIVERSITY. Equitable PES schemes, with a focus on watershed services and biodiversity conservation, are a valuable financing mechanism for conservation programs in Australia, Asia, Latin America and Europe (WWF 2006). In Africa, however, very few organizations are working on ways in which emerging carbon markets may benefit the continent. Only 23 out of the 850 projects registered under the UN s Clean Development Mechanism are on the African continent; six of them are in South Africa (Wunder 2007). There are also limited programs designed for rewarding upstream land users for adopting land management practices that improve water quantity and/or quality for people living downstream. Without effectively designed PES schemes it will be challenging to finance and sustain development programs in Africa. James G. Kairo is Senior Research Officer at the Kenya Marine and Fisheries Research Institute in Mombasa. 107

2 ETFRN NEWS: SEPTEMBER 2008 PES programs in Kenya Kenya has a population of 32 million people, 90% of which depend on natural resources for their livelihoods. Resource-based industries such as agriculture and tourism contribute over 80% of Kenya s GDP. There is thus a growing interest in using marketbased instruments such as PES to conserve ecosystem services and achieve sustainable development. Although these tools have enormous potential for encouraging sustainable land management, biodiversity conservation and rural livelihoods, they have not been adequately exploited in Kenya. A review of cases of actual and proposed PES programs in Kenya identified 15 projects on carbon sequestration, biodiversity conservation, watershed protection and a bundled combination of these services (Waage et al. 2006). Most of the biodiversity projects such as those in Shompole and II Ngwesi community ranches fall under ecotourism and have received support from the EU through the Community Development Trust Fund. Africa accounts for less than 3% of global CDM projects. Some of the CDM projects in Kenya include the Mumias Sugar Company s Bagasse co-generation project and geothermal and hydro-electric energy projects (Table 1). When fully operational these projects will earn the country a huge amount of money through the sale of more than 600,000 tonnes of carbon to the World Bank per year. Table 1: CDM projects in Kenya Project Reductions* Bagasse-based co-generation project, Mumias Sugar Company 95,521 Sondu Miriu hydro-electric project 211,068 Olkaria II geothermal expansion project 171,026 Conversion of the Kipevu open-cycle gas turbine to a combined-cycle operation project 44,808 Redevelopment of Tana hydro-electric station 42,258 Optimisation of Kiambere hydro-electric project 38,376 Bagasse-based co-generation project, Muhoroni Sugar Company 16,758 Total 619,815 *Emission reductions in metric tonnes of CO 2 equivalent per annum. Carbon sequestration through afforestation and reforestation Forests store carbon and thereby are important in regulating the global climate (Brown et al. 1996). There are two main approaches to increasing carbon sequestration by plants (WWF 2006): replanting new trees (afforestation, reforestation and agroforestry); and reducing emissions through avoided deforestation. 108

3 5.3 EXPERIENCES WITH PES IN KENYA Several small-scale forestry projects have been initiated in different parts of Kenya with an objective of meeting community needs for wood products and environmental services. Local and international NGOs support these initiatives in collaboration with government institutions and local communities. In the Coast, Western and Eastern provinces of Kenya, the Bureau of Economic Analysis International (BEA) has initiated community forests to sequester carbon (Waage et al. 2006). The World Agroforestry Centre (WAC) formerly the International Center for Research in Agro-Forestry (ICRAF) is undertaking agroforestry projects in the entire western part of Kenya, including the Nyando Basin and Yala Swamp. WAC s initiative, Rewarding Upland Poor for Environmental Services (RUPES), is helping to address many of the complexities associated with PES in watershed management. Other small-scale carbon forests include mangrove reforestation initiatives by the Kenya Marine and Fisheries Research Institute (KMFRI) along the coast (Kairo, Wanjiru and Ochiewo, In press, Table 2). Unfortunately, UNFCCC certification has not been sought for any of the carbon value sequestered through these initiatives. The World Bank, through the Carbon Facility Fund, has earmarked 57 million for land use, land-use change and forestry (LULUCF) projects worldwide. In Kenya, the Green Belt Movement has signed a LULUCF project with the bank to promote SFM in central highlands of Kenya. The project proposes to reforest 1,876 ha of degraded public land and private land with community access in the Aberdare Range and Mount Kenya watersheds. Lands in the pilot area have been deforested by charcoal production or conversion to illegal agriculture and cattle grazing. The forests are also threatened by illegal logging activities. The project pays local communities and provides them with the technology and knowledge to reforest these lands and manage the new forest. The project is expected to sequester around 0.1 Mt CO 2 e by 2012 and 0.38 Mt CO 2 e by The reforestation will bring important environmental benefits by reducing erosion, protecting water sources, regulating water flows and enhancing biodiversity. Table 2. Stand data for a 12-year-old mangrove plantation in Kenya Stem Diameter at Breast Height (DBH) < Total Density (stems/ha) Marketable volume (m 3 /ha) ± 13.8 Non-marketable volume (m 3 /ha) 43.4 ± 10.0 Standing biomass (t/ha) ± 24.0 Below-ground biomass (t/ha) 24.9 ± 11.4 Source: Kairo, Wanjiru and Ochiewo, In press 109

4 ETFRN NEWS: SEPTEMBER 2008 Paying for biodiversity Community payments for biodiversity conservation in Kenya have been achieved through community-based ecotourism enterprises where visitors pay an entry fee. Such initiatives are already in operation in the Mwaluganje Elephant Sanctuary in Kwale district, Amboseli and the Maasai Mara Game Reserve. The money generated is used to finance community development projects in education, infrastructure and health. A different arrangement for biodiversity conservation exists in Watamu and Malindi Marine Protected Areas on the north coast of Kenya. Watamu and Malindi reserves are important nesting and feeding grounds for endangered sea turtles and have been designated as a biosphere reserve of international importance under UNESCO s Man and Biosphere programme. As in other parts along the coast, turtles in Watamu and Malindi reserve continue to face intense pressure from the local communities who hunt them for food, traditional medicines and shell crafts. Growing coastal tourism development and marine pollution has exacerbated sea turtle loss in Kenya (GOK 2008). In response to these problems, Watamu Turtle Watch (WTW), a local NGO, launched an incentive programme to encourage fishermen to release turtles that are accidentally caught in fishing nets. The fishermen are paid about 2 for reporting each released turtle to the WTW and to compensate them for any damage to their nets. Through this programme, the number of caught-and-released turtles has risen from 16 in 1998 to 544 in Funding for the incentive programme has come largely from the WTW s Adopt-A-Turtle programme. For just 19, the adopter is allowed to name the turtle, is given a certificate of adoption, receives updates if the turtle is later recaught, and is sent small, locally produced crafts that help support the local economy. Payment for watershed protection Apart from biodiversity and carbon storage, forests contribute to protecting water quality, regulating water flows, preventing floods, controlling soil salinization, and maintaining aquatic habitats (WWF 2006). Watershed services generally benefit downstream activities. One example of a PES scheme playing a useful role in a catchment project is the Sasumua Water Treatment Plant in Kenya. The Sasumua plant, located in the southern part of the Aberdares Mountains, is managed by the Nairobi Water Company and supplies about 20% of Nairobi s potable water. Currently, the plant is threatened by sedimentation (which hinders water intakes and impedes water supply to the plant) and by contamination. This increases treatment costs (Pagiola 2006). WAC, through the World Bank, is working to develop a PES scheme for the watersheds serving Sasumua Plant. Another programme involving protection of water catchments in Kenya is the World Bank s Natural Resources Management Project for the Upper Tana Catchment. The objectives of the project are to enhance the institutional capacity to manage water and 110

5 5.3 EXPERIENCES WITH PES IN KENYA forest resources, reduce the incidence and severity of water shocks in river catchments, and improve the livelihoods of communities participating in the co-management of water and forests. Further, the project aims at initiating schemes to reward upland communities involved in the conservation of upper Tana Catchments. Conclusion Kenya lacks the adequate legal or regulatory framework for PES. PES schemes operating in the country are rudimentary and do not provide actual cash payments. The government has been slow to implement PES and to develop focused policy frameworks targeted to the promotion of PES. This is despite the great opportunities in the country for the government to participate as either a buyer or seller of ecosystem services. For example, there are 336 designated PAs; five of them are designated as biosphere reserves. These PAs have international quality, harbouring biodiverse flora and fauna as well as providing environmental services. With properly instituted PES, the government of Kenya stands to benefit from the ecosystem services provided by these conservation areas, including carbon sequestration, biodiversity conservation and protection of water catchments. The current policy framework is broad enough to accommodate a flexible spectrum of PES proposals in Kenya. Promotion and development of knowledge and interest in PES would easily finance conservation programs and contribute to sustainable development in the country. References Brown, S., J. Sathaye, M. Cannel and P. Kauppi Management of Forests for Mitigation of Greenhouse Gas Emissions. In R. T. Watson, M.C. Zinyowera and R.H. Moss (eds.). Climate Change 1995: Impacts, adaptations and mitigation of climate change Scientific and Technical Analysis, pp Cambridge and New York: Cambridge University Press. GOK (Government of Kenya) State of the Coast Report. Draft version. National Environment Management Authority (NEMA), Nairobi, Kenya. Kairo, J. G., C. Wanjiru and J. Ochiewo. In press. Net Pay: Economic Analysis of Mangrove Plantation in Kenya. Journal of Sustainable Forestry. Pagiola, S Payments for Environmental Services: Combining science and economics for sustainable conservation. World Bank Environmental Department. Kathryn Fuller Science for Nature Symposium, Washington, D.C. Waage, S., S. Scherr, M. Jenkins and M. Inbar A scoping assessment of current work on payments for ecosystem services in Asia, Latin America, and East and Southern Africa. Forest Trends. Wunder, S The Efficiency of Payments for Environmental Services in Tropical Conservation. Conservation Biology 21 (1): WWF Payments for environmental services: An equitable approach for reducing poverty and conserving nature. Gland, Switzerland: WWF. 111