Center for International Forestry Research

Transcription

1 CIFOR Presentation: OECD Paris 010

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3 Center for International Forestry Research

4 Sven Wunder Principal Economist Payments for Environmental Services: Achieving Efficiency in Practice

5 Our PES definition 1. a voluntary transaction where. a well-defined environmental service (ES) - or a land-use likely to secure that ES -. is being bought by a (min. one) ES buyer. from a (min. one) ES provider. if and only if the ES provider continuously secures ES provision (conditionality). - Four areas of application: carbon, watershed, biodiversity, landscape beauty - User vs. gov t financed PES

6 Vital concepts from theory Baselines Additionality Leakage Permanence

7 A) Static Baseline: ex forestry CDM Forest Carbon Stock Additionality With payment Without payment PES Time

8 ) Deteriorating baseline: ex REDD Forest Carbon Stock Additionality With payment Without payment REDD Implementation Time

9 C) Improving baseline: ex C. Rica PSA Forest Carbon Stock Additionality With payment Without payment PES Time

10 Leakage: -Def: Effectiveness loss due to threat displacement in space - When target and intervention areas coincide, no leakage - On-farm leakage - Leakage belt - GE effects (price)

11 Permanence: -The option of maintaining a service beyond of the temporal payment horizon - Cannot normally be expected in PES implementation: you tend to get what you pay for, as long as you pay externality persists

12 Design Lessons: 1. Focus on threat/ leverage areas. Pay acc. to customized cost levels. Focus on high-service areas. Strengthen conditionality

13 1. Variable threat leverage =>Watch out for adverse selection bias! => especially in conservation PES Of 1000 forest plots, only go (0.%) Threat very unequally distributed in space!

14 . Customize payments to costs

15 REDD Conservation Opportunity Costs Brazilian Amazon,

16 Costos de oportunidad REDD Conservation Opportunity Costs Brazilian Amazon, Extensive cattle CCX temporario Annual crops CCX permanente Intensive cattle Oil palm Soy Precious timbers Remotest areas Deforestacion evitada (ha)

17 Costos de oportunidad Costs with a uniform payment rate 0 0 CCX temporario CCX permanente Deforestacion evitada (ha)

18 Costos de oportunidad Costs with differentiated payments 0 0 CCX temporario CCX permanente Deforestacion evitada (ha)

19 . Pay according to service levels - What we want eventually is not just additional forest cover (=proxy), but additional forest environmental services (=output)

20 Costa Rica study (ZEF, CIFOR) T. Wünscher: Targeting potential in PSA (ES delivery, threat, opp costs (Nicoya Peninsula)

21 a) Nicoya: watershed protection Criteria: a) water consumers b) slopes

22 b) Nicoya forest carbon Criterion: tco /ha

23 c) Nicoya services aggregated Equal weights assigned

24 Can we combine three spatial targeting criteria? 1. Benefits. Threat Yes we can!. Costs PES in Costa Rica Problem Concept Data & Methodology Results Conclusions

25 Service provision at plot level Site 1 Site Site Site Delivered Services (quantified) PES in Costa Rica Problem Concept Data & Methodology Results Conclusions

26 Threat / leverage of plots e.g. risk of deforestation Services Risk Additionality Site 1 x 0. Site 1 Site x 0.1 Site Site x 1.0 Site Site x 0.0 Site Delivered Services Additionality PES in Costa Rica Problem Concept Data & Methodology Results Conclusions 6

27 Costs of plots Participation/social costs (opportunity + transaction + conservation costs) Program costs (social costs + rents) Participation Costs 6$ Site Site 1 Site Site Site PES in Costa Rica Problem Concept Data & Methodology Results Conclusions 7

28 8 GIS as Data Facilitating Framework Biodiversity Watershed Carbon Landscape $ $ 1$ 9$ $ 17$ 16$ $ 81$ $ 8$ 1$ 88$ $ $ 0$ 7$ 0$ $ $ 70$ $ 1$ 1$ 7$ $ 6$ $ $ $ 1$ 10$ 6$ 0$ 0$ $ Threat Provision Cost Selected Sites Problem Concept Results Data & Methodology PES in Costa Rica Conclusions

29 . Enforce conditionality Best of all worlds for PES recipients: cash in payments, while making little or no adjustments to business as usual (=e.g. deforest) Monitoring : probability of detecting non-compliance Sanctions : low sanctions => low expected penalty => low probability of losing payment Timing payments, ex ante vs ex post: keep leverage vs. frontloading

30 Conclusions & perspectives 1. PES have good preconditions for being effective and efficient: performance-based (=direct), voluntary, customizable => desirable market-based features. PES are also institutionally demanding (e.g. secure land tenure) and sometimes costly (e.g. negotiation). Concerns about leakage and permanence can be valid, but don t over-emphasize them!. Heterogeneities in space (services, leverage, cost) are usually much more important efficiency drivers!. Conditionality is the key to PES enforce it!

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32 Ex: Costa Rican gov t PES what lessons? (+A.Pfaff) Pioneer showcase, learning by doing Uniform prices, self-selection, low targeting Little forest cover additionality of PES: A) Other factors had already slowed defor. B) Self-selection of low-threat areas, but C) PES supplemented other policies (c & c) D) Forest quality outcome

33 I. User-financed schemes - Examples: many watershed (Vittel, Catskills, Pimampiro ) and carbon schemes (Scolel Te, FACE ) - Characteristics: mostly small-scale, single service - single buyer, seldom side objectives; focused - Pros: targeting to high-service, high-threat & low-cost areas (e.g. differentiated payments), often close to pure PES ; => effective - Cons: a) hard to get voluntary buy-in for multiple-user externalities (biodiversity) free riding; b) tend to have large start-up costs => maybe not cost-effective? challenge to make them cheaper to install (=costefficient)!

34 II. Gov t-financed schemes - Ex: PSA Costa Rica, Mexico, agri-envir (EU,US, China) - Characteristics: large scale (nation-wide), many services, state acts as ES buyer, multiple sideobjectives (politics), less focused - Cons: often flat uniform payments, non-targeted, widespread money for nothing (low additionality) => often less effective in ES delivery - Pros: a) adequate for ES with free riding dominance (biodiv, multi-service layering); b) admin economies of scale => low-cost potential challenge to make them more targeted and effective!

35 PES & legality: theory vs. practice Source: Adapted from TEEB (009) Service values, provision costs (or increase forest cover, biodiv ) No ES