Does paying pay off?

The ongoing degradation of ecosystems threaten future food production and the international community thus urgently has to plan for how to secure fundamental life-support services for the future, so called ecosystem services (ES). Examples of such ES are climate regulation, nutrient cycles, fresh water provision, etc.This report is focused on two distinct strategies to make land users in tropical rainforest areas continue to provide ecosystem services. The first approach, Payment for Ecosystem Services (PES), is an economic instrument designed at global and national levels. Several PES schemes are currently implemented in a global context where increasing human demands for food, fibre and fuel are accelerating competition for land. The overall aim of the PES projects covered by this report is to lower the emission of green house gas on national and global levels and they are especially directed towards forest areas. The PES projects specify that specific rural groups are paid if they agree to protect, manage or restore the ecosystem service provisioning system within their forest territories. This report highlights that many PES initiatives are being implemented with a ‘conservation perspective’, rather than seeing ecosystem services as integrated with production and livelihoods. There are also alternative strategies to manage ecosystem services. In this report we put an emphasis on an approach where production and conservation are planned for within the same landscape and production systems. Many smallholders already integrate and maintain ecosystem services in their agricultural/forest production systems in a long-term perspective, while producing food, fibre and fuel for the households’ own consumption as well as for sale. In such a system, the local communities are totally dependent on the ecosystem services to re-generate conditions for their agricultural production and/or forest extraction. The focus in such farming-forestry systems, using little or no inputs, which are totally dependent on renewable resources, is on how to increase agricultural/forest production by supporting local ecosystem services, such as soil fertility and structure, pollination, micro climate, biological control of crop pests, etc. The ecosystem services functions, such as carbon sequestration, then emerge as a ‘by-product’ out of these production systems. Increased soil humus in the soil and biomass accumulation are other examples of such ‘by-products’. We want to illustrate potentials and challenges with the aforementioned two approaches to secure ecosystem provisions, and how they are articulated within their specific contexts. This report explores these two approaches by examining case-studies in tropical forest areas in Peru, Brazil, Tanzania and Vietnam, as well as the experiences of EU-designed PES schemes for subsidies/support so as to achieve environmental protection in Sweden