http pubs iied org16639 IIED Ecosystems poverty alleviation
http: //pubs. iied. org/16639 IIED/ Ecosystems, poverty alleviation and conditional transfers Module 1 – Key Insights Ina Porras and Nigel Asquith, 2018
Impacts on wealth Impacts on people Impact on nature © Jeronimo Goméz Pérez © Ina Porras (IIED)
PES and conditional transfers • Conditional, positive rewards for good actions • Makes economic sense to ES provider • Promote positive externalities © Mikoko Pamoja, Community Carbon programme, Kenya
The ‘family’ of conditional transfers instruments • Economic incentives provide motivations to behave in certain ways. They include subsidies, conditional and/or unconditional transfers, and integrated tools such as ICDPs. Economic “disincentives” –e. g. taxes, charges, aim at curbing negative behaviour. • Conditional transfers introduce “conditionality” to the incentive. • PES are a form of CTs used to introduce positive rewards to better environmental management. • “PES-like” deals involve various types of institutional arrangements -they often have conditional and/or unconditional components, • “Purist” PES (e. g. defined Wunder 2005) are a subcomponent of these agreements. Wunder (2015) revised his definition, which features conditionality as a key element of the incentive. Source: Focus group at ESPA Science Conference, Edinburgh 2017
Experiences at scale Bhutan/ Nepal/ Vietnam emerging PES Mexico PSA/ Scolel-Te Costa Rica PSA Uganda: Trees for global benefit Water. Shared (Bolivia, Ecuador, Colombia) Bangladesh Jatka conservation programme India Mahatma Gandhi Rural Employment Guaranteed Kenya: Blue carbon/mangroves Bolsa Floresta, Brazil PRC SLCP/ Eco-compensation The Philippines Greening the Nation Madagascar (emerging) PES South Africa: “Environmental works programme” Source: Prepared by Ina Porras, IIED See MODULE 2 for full details
Political support Sustainable financing Enabling conditions for scaling up Lean institutional set up Tools and systems for effective implementation Demonstrate impact Source: Based on Porras et al. (2016), from practitioners and policy makers’ experience in cases reviewed in MODULE 2.
Political support • Make it attractive: Make clearer connections of the links of investments in nature, wellbeing and wealth. • Link it to commitments: Mainstream the environment into ‘now’ agendas: e. g. INDC, SDGs, Green Economy • Propose instruments: Conditional transfers can be politically attractive (short-term/ long-term; performancebased) and can work alongside other instruments/ rules.
Link to poverty alleviation: “People” are not all the same. Neither should be the instruments. • Ultra poor: probably better to use unconditional transfers to strengthen their capacities; • Medium poor: CT (behaviour-change, or direct interventions) relatively more cost-effective. • Better off: may be more able to comply with regulation without need for subsidies or incentives.
Sustainable, realistic finance • Target those who can (and should) pay. • Have a clear collection mechanism that can be replicated and will be easy to collect (taxes, charges, fees) Two environmentally identical watersheds, with different number of downstream beneficiaries and ability to pay. • Establish a clear system to manage resources transparently Source: Based on Pagiola and Platais, 2005
New sources of financing • Social protection and environment joint budgets © Angela Yang • Environmental tax reform • Ear-marked taxes • Direct deals: carbon, water © Peter Etelej • Conservation investment
Implementation: Clear rules of the game Prohibition Economy Institutions and tools Ecosystem services as inputs to production or final users Rewards Regulation: Prohibition of deforest reduces opportunity cost of forest/s, but places protection costs on the landholder. Reward: Cash payment to landowner. Annual conditional payments per hectare forest protection and reforestation helps compensate for cost of protection. Rules on rent capture: PES Law creates rules and the system to extract rents from users (water users) and polluters (through fuel tax), and international sources. Ecosystems Fund: Independently managed, it collects revenues from multiple sources and provides financial sustainability National programme manager: legally appointed, manages and monitors systems Local facilitators: officially registered, they provide technical and logistic support to landowners (e. g. management plans, paperwork) and first stop for monitoring. Source: Prepared by Ina Porras, IIED PES in Costa Rica – Module 2
Implementation: Clear business proposition Bolsa Floresta Brazil See next page Source: See Module 2 Bolsa Floresta
© Bolsa Floresta
Implementation: Clear connections across government scales China’s Eco-compensation / SLCP Source: See Module 2 China
Implementation: clear upstream/ downstream link Watershared reciprocal agreements, Bolivia Water Rewards: Selection criteria is a simple mix of hydrological rules of thumb, conservation priorities and downstream requirements, with light-touch monitoring. Development projects Upstream communities W at er Conflict: • Solutions reached by negotiation; • Rewards are social recognitions of mutually beneficial deals; provide and protect water quality and quantity Conflict resolution by talking, raising awareness and small reward Downstream local fund: commitment to local, long-term financing Institutions and tools: • Water utilities • Municipal governments • NGO (Natura) Source: See Module 2 Watershared, BOLIVIA
Implementation: transparency in long chains (performance, reporting, certification) Ethical community carbon, Plan Vivo Source: See Module 2 Carbon offsets
Implementation: Link to existing value chains Source: IIED/HIVOS Carbon and agriculture
Impacts: on environment and on people Design Additionality Spill-overs Conditionality Environmental impacts It’s a lot to do with design, and a clear theory of change Pre-existing inequalities Payment types, procedural fairness Distribution Welfare impacts Source: Ina Porras and Nigel Asquith, based on discussion from Borner et al 2017
Outcome: impact on ecosystem services (e. g. water quality) Impact evaluation: non-linearity of scale and time max Thresholds: Good ideas applied only at small scale may not show results. b Evaluating impact: Evaluations conducted “too early” may show low impact and discourage efforts. a c 0 max 0 Action: scale of implemented action (e. g. hectares enrolled in PES) Strategy? is it possible to “boost” early stages of project for example through direct interventions, and follow up with behaviour incentives? Source: Based on Pynegar (2018)
Where now? • Research can help, but needs to reach practitioners • Many useful tools to: - Improve design, targeting, and monitoring; - Measure impacts using models and open source data; - Help understand behavioural heterogeneity and design evidence-based responses; - Help measure the economic impacts of environmental investments (ERR) at scales • Need practitioner-friendly tools • Capacity building and South-South exchanges • More active engagement academic-research-practitioners
http: //pubs. iied. org/16639 IIED/ • A short guidance for practitioners, based on enabling conditions and case studies, • Written as four modules for capacity building. • Short, clear examples of pragmatic experiences • Building a South-South network of practice
This work represents the reflections of a wide range of practitioners, researchers and policy makers involved in the daily implementation of conditional transfers and payments for ecosystem services programmes. We would like to thank the ESPA programme for providing the funding to conduct this review, as well as the space to access the very latest scientific advances on ecosystems and poverty alleviation in developing countries. We would like to especially thank Paul Steele, Bhaskar Vira, Esteve Corbera, Virgilio Viana, Mahesh Poudyal, Kate Schreckenberg and Julia Jones for their insightful comments and feedback along various stages of this work. We would also like to specially thank Zaiza Khan and Cinzia Cimmino for their support in editing this document. All errors and omission remain the responsibility of the authors. Ina Porras and Nigel Asquith, 2018 For more information and materials visit: http: //www. iied. org/
Notes by slide 1 Notes: highlight the importance of natural ecosystems for: 1) nature itself, beauty, and biodiversity. 2) as sources of wellbeing for people at the farm level (photo from Mexico, from a plot that used to be maize only and it’s now agroforestry, and trees planted through carbon offsetting now are large enough to be extracted for timber. 3) Supporting wealth in the country – this is a headline from Costa Rica where hydroelectricity is one of the main sources of electricity. Protection of forest in upper catchments, through national parks and PES in private buffer areas, are important instruments to support conservation and sustainable management of these areas. Also explain that ESPA provided funds for Ina Porras (IIED) and Nigel Asquith (Natura), who have been working for many years in PES-lore, to bring together key insights learned throughout these years and transform this information for practitioners. 2 Definitions are important – not just as “academic quarrel” but to the implementation of the instrument. Wunder (2015) is a very good paper to look at the evolution of definitions, and why are they important. There is an element of vagueness implied in “PES-like” approached. Among other problems, it can lead difficulties in monitoring impacts on the ground. Conditional transfers (CT), such as guaranteed job schemes, pensions and food transfers, have been used for achieving social objectives and raising the living standards of vulnerable people. Conditional transfers are also used to pursue environmental objectives, for example promoting agroforestry or forest protection with incentives such as environmental subsidies and payments for ecosystem services (PES). Both social CTs and PES have the same starting point: the assumption that direct, conditional incentives are the most effective way to change behaviour. Carefully designed, these incentives can contribute to the wellbeing of people, especially poor and vulnerable groups. and 3 4 SEE MODULE 2 FOR DETAILS. We looked at a wide variety of programmes that: • Managed to go beyond “project” to “programme” • Managed to achieve scale • Are promising examples of incentives towards stewardship for good ecosystem management. We also looked at two types of conditional transfers: 1) Conditional transfers supporting direct interventions through job schemes (e. g. gully control) – which ARE NOT PES, but provide good examples of how to engage with landless, poor/vulnerable people. These programmes also have environmental works in their portfolio and can benefit from experiences from PES elsewhere. And 2) Conditional transfers supporting positive changes in behaviour, more in line with PES idea. Some are national programmes (scaled up) or replication of local-based initiatives (scale out). 5 Notes: based on Porras et al. (2016 a). An international workshop in Cambridge (co-funded by ESPA, September 2016) brought together policy makers, practitioners and donors to share practical experiences on the enabling conditions for PES. A full list of participants is available in the workshop report (Porras et al. , 2017). These conditions were discussed in more detail by participants to the 5 th International Eco-Compensation Conference in Kunming, PRC, November 2016. Successful CT/PES schemes exhibit a series of enabling conditions: high level political support, sustainable financing streams, lean institutional set ups, tools and systems for effective implementation and a clear ability to demonstrate impact. Cross learning from our cases has proved to be an effective way to build capacity, and to improve CT/PES programmes from the ground up. Capacity building, bringing in scientific advances in modelling, monitoring, and understanding behaviour should include mid-level technical government staff and not only universities. Research into the gaps and potential of including poor and vulnerable people into environmental policy needs to reach a wider audience that includes not just Environmental Ministries and conservation professionals, but also mainstreaming into the agendas of Ministries of Finance, Ministries of Employment and the private sector. New advances from academic research can help understand these trade-offs, as well as design informed policy responses (see for example Mace et al. 2018, which summarises eight years of research on ecosystems and poverty alleviation). 6 Political attractiveness: The conditionality element is what appears to make PES politically attractive. Conditionality offers a simple way to link policy (eg payment) to relatively simple outcomes (eg number of hectares of forest protected, number of jobs created). A wealth of knowledge has been produced on the way that conditionality affects outcomes (eg MIT Poverty Action Lab, 3 ie, and the World Bank Impact Evaluation Group). Conditionality is linked to: 1) The understanding of the causal links between actions, ecosystem services and outcomes, which defines the `actions’ promoted; 2) The institutional context that enables ecosystem providers to comply with these actions, which includes property rights and collective action, as well as access to technical and financial resources; and 3) The extent to which the programme implementers enforce compliance (Hejnowicz et al. , 2014; Porras et al. , 2013 a; Wells et al. , 2017).
7 Political support by actively engaging the poverty agenda: Ultra poor requires help without conditions attached. People live in extreme poverty with very little access to support. Imposing conditions on payments can make them worse-off and create further unbalances. Medium poor; Medium poor” refers often to smallholders with limited (but some) access and control to resources. Conditional transfers tend to work better for this group. Better off: Wealthier landowners are, in theory, better equipped to comply with regulation without incentives. In the practice however these groups have more power and often appropriate resources available. The linkages between ecosystems and poverty alleviation are neither simple nor linear. Mace et al. (2018) summarise the latest evidence on the nature of these relations and governance structures that help improve the wellbeing of vulnerable people. In this handbook, we ask whether conditional transfers such as PES can help alleviate poverty, in the context of ecosystem management. Table 3 and Menton and Barret (2018) provide a synthesis on the arguments in favour and against. Our entry point in this handbook, presented in Figure 2, does not suggest a `one tool fits all’ approach. Rather, it acknowledges that CTs operate within a wider range of policy instruments, which can be used to target ecosystems of high importance (eg fragile, or in need of restoration), while bringing forward the issues surrounding heterogeneity of ecosystem service providers. As the Figure shows, the choice of policy instrument to use can be – and should be – linked to poverty levels. As presented, conditional transfers may work better in the `medium-poor’ range, where incentives can be more competitive and ‘tip the balance’ of costs of engagement. Very poor members of society, or ‘ultra-poor’, may benefit better from unconditional transfers and other measures that address contextual and institutional gaps. As mentioned before, CTs are favoured by its proponents as a means to provide short-term poverty alleviation through a payment, and long-term benefits by improving their natural assets. These potential benefits could be significant, for example new forms of income, diversification, technological transfer, increased land security, capacity building, improved natural conditions, etc. But the poor may also be affected by significant barriers to access the programme, by being unable to satisfy the conditions and indeed to derive meaningful benefits. Constraints for the poor can be high, and can include high transaction costs, unclear property rights, weak bargaining power, an unclear regulatory framework, inadequate skills, market contacts, knowledge, and coordination. In practice, poverty alleviation can be addressed at least at three fronts: 1) by directly supporting the poor people located at project sites; 2) by making clear the linkages to poor people who benefit from ecosystems, and 3) through this, make the case to access social/rural development budget lines. 8 Funding: Two identical watersheds in Dominican Republic (Rio Ocoa, Rio Nizao). Roughly same structure, hydrology, soils, and conservation problems. Downstream users vary – Rio Nizao provides water for several hydroelectric projects in cascade, irrigation and large cities. Rio Ocoa provides water for a small community with rural agriculture. Economic value of ecosystem services are linked to the users – and their willingness/ ability to pay for the ES. While the amount of water is similar in both watersheds, the economic value of the ecosystem services varies a lot. IMPORTANT ELEMENT TO HIGHLIGHT: Focus initially on those who have higher ability to pay. Source: Pagiola and Platais, 2005. 9 Background picture source: http: //images. gawker. com/xlakcogod 8 ulg 9 czbdol/original. jpg Funding: Having significant, sustainable funding will make the difference for upscaling across space, but importantly across time. Environmetal investments take many years to complete, and are difficult to implement initially. Funding needs to be secured for longer periods of time than 1 or 3 years which are customary in voluntary agreements. There are growing examples of where the money for PES/CT can come from. Governments are still the main source, but increasingly they look at ways to obtain new forms e. g. through new charges (e. g. carbon), and by looking at the landscape of incentives that could complement or negatively affect environmental investments (e. g. perverse incentives). Good tools for macro analysis of finance include the Climate Expenditure Review and the methodologies provided by BIOFIN. 10 Tools: CR provides a good example of an integrated approach to PES: Financial sustainability – by providing the revenues from fuel tax, even if the pledged amount has changed throughout the years. Also, by allowing the managing institutions to capture payments from direct users (make international sales, deals with local users, etc); Creation of the legal framework that recognises the principle; Institutional framework to administer the programme, allows for the financial and technical groups to work together. The managing institution, FONAFIFO, is a public organisation managed as a private one, which gives enough flexibility to work. Political support from the highest to the lowest levels – the Programme has “survived” several changes in administration and political parties. Participation of civil society has been key at all stages, and provides important feedback to the programme. Transparency and credibility from monitoring, administration, forest regents, audits, GIS, etc.
11 and 12 Tools: Business case using a business canvas in Bolsa Floresta, Brazil. The design of the BFP follows a business approach, based around the business canvas model – see Figure. Some of the main components are presented in the next section, but for more information see FAS (2017). Laws and regulations. This programme is part of the state public policy, instituted by the Government of Amazonas in 2007. The main laws underpinning the programme are Law 3135 on Climate Change, Environmental Conservation and Sustainable Development of Amazonas, and Supplementary Law 53 concerning the State System for Protected Areas (SEUC). The laws determine environmental legislation at the State level, and paved the way forest-based environmental services linked to social justice and equality. Targeting and prioritisation. The prioritization of areas in the Bolsa Floresta Program have the following reference attributes: identification of relevant areas, focusing on Sustainable Use Protected Area (PA) as well as the presence of potential providers, i. e. forest guardians and riverine communities, for environmental services in the area; Identification of critical areas by looking at risk of reduction in provision, taking into account existing provision of ecosystem services, level of coverage by command control structures, external pressure on the PAs with impacts on ecosystem conservation and occurrence of unsustainable activities in the territory. Identification of potential areas by understanding needs of potential providers, including social vulnerability and access to public services; level of social organisation, willingness to conserve; Priority areas for PES schemes also taking into account cost versus conservation impact (resident populations versus area of the PAs). These attributes are rated numerically (e. g. 3=high, 2=medium, 1=low; Yes=1, No=0) and added to identify the areas with higher potential. FAS (2017) provides in-depth details on implementing these targeting strategies. Type of transfers: The structure of BFP begun with three components considered basic for quality of income (Figure 12): community infrastructure, cash reward, and community empowerment. After 2008, following a series of workshops and consultations, the program was re-organised, with additional components aimed at promoting sustainable income, supporting grassroots organisations and social investments (education, transportation, health, and communication). These additional components are funded by the project, not as (government) public services. The relative weight of the incentive package was re-arranged, with more emphasis on cash reward, in response to the community feedback. The consultation process also determined the stronger focus on women as main recipients of the cash and proposed equal level of investments across different communities. Figure 12. Payment modalities in Bolsa Floresta FAS management strategies. Several factors appear also help improve programme effectiveness: The development and use of cost indicators (e. g. % overall implementation costs; number of days before purchasing air tickets controlled per individual staff) presented and discussed at length on quarterly FAS staff and board meetings lead to creation of an institutional culture of cost reduction. The use of indicators of key outcomes (e. g. gender - % of women participation, % projects fully implemented), presented and discussed at monthly (up to 2013) or quarterly (2014 onwards) internal management meetings at FAS helped identify problems and develop solutions for improved efficacy. Partnerships with other organisations (e. g. state and municipal governments, NGOs, grassroots organisations) helped reducing costs of field journeys, demand of staff and improved outcomes. When possible, bulk purchase equipment and goods by FAS administration, which increases the bargaining power with suppliers and helps reduce costs. ICT systems for inclusion. The Family (cash) component is paid through a Bradesco Bank debit card, directly to the account of individual families. This benefit is paid every month and accumulates in the beneficiary’s account until collected when the family goes to town or to a remote Bradesco express ATM machine. All families visit the city at least two or three times per year, when they visit relatives, for education, medical purposes etc. The link to bank account reduces paperwork and the chances of mismanagement of resources, while promoting financial inclusion by encouraging the creation of bank accounts for the families in these remote locations. Programme’s theory of change, based on four points: 1) Intermediate results that should be achieved by the providers in terms of changes in practices, 2) direct results anticipated from rewards foreseen in the scheme; 3) complementary actions to be realised by the leader of the scheme or partners; and 4) complementary actions outside the governability of the scheme. FAS (2017) provides clear details on the specific components of this theory of change. Clear gender equity agenda, that includes objectives, resources, indicators and monitoring. The programme has defined clear strategies for action, which include: 1) control of cash resources by women; 2) incentive for participation of women in participative planning workshops, leadership meetings and other processes of participatory management; 3) incentivise leadership of women in projects that generate income and enterprise; 4) educational actions on the rights of women; and 5) support for the creation and strengthening of clubs and associations of women; Ensuring transparency and feedback. Transparency is a key element of the implementation strategy of FAS. The governance of the BFP includes a leadership meeting, which includes 40 to 70 presidents and other leaders of grass root organisations that represent the over 40 thousand beneficiaries of different areas. These are umbrella organisations (“associaçao mãe”), which are formally established and represent small community level associations, mostly informal. These meetings take place twice a year, usually in Manaus (in 2012 took place in Rio de Janeiro, at Rio+20 meeting) and last five days. These leadership meetings provide a unique space for open evaluation and discussion of the BFP, with a focus on challenges and solutions. These meetings also provide a unique space for the leaders to engage in direct debate with high ranking governmental officials, thus empowering them to claim their rights. Finally, the leadership meetings provide an opportunity for sharing lessons and for developing new leaders. Since 2016, the leadership meetings are also receiving 10 to 20% of youth participants.
11 and Once a year the results of the BFP are discussed in seminars held at local universities (UFAM, UEA) or at FAS. These public seminars provide a space for multi-stakeholder interaction, especially with academia and NGOs, focusing on sharing knowledge and reduce partisan criticism of the BFP. Complete financial statements of FAS and the BFP are published in full in the web and registered in a public notary. This disclosure is preceded by an annual independent audit by Pw. C, which is reviewed and approved by the Fiscal Board and the Board of Administration of FAS. A detailed activities report (+100 pages) is published yearly and also posted in the web for open access. 12 13 Implementation: China: : http: //pubs. iied. org/search/? k=G 04270. The People’s Republic of China (PRC) has been experimenting for many years now on eco-compensations programmes, as ways to redress missing market signals for ecosystem services ( Zhang et al. , 2009). This section provides a quick insight into one of its larger programmes: the Sloping Land Conversion Programme. The Sloping Land Conversion Program (SLCP, also known as “Grain for Green”) is the largest ecological restoration project in PRC and PES initiative in the developing world, with a total current investment of more than US$69 billion (Liu and Lan, 2015). It was launched together with the Natural Forest Protection Program (NFPP) as a response to the widespread flood in the PRC in 1998 and has undergone several development stages. It is a key component of the Eco-Compensation Programme, which is a compendium of environmental policies and instruments, including environmental fiscal reform. The programme uses a series of conditional transfers alongside wider policies promoting off-farm income to encourage ecological restoration and contribute towards PRC’s vision of Eco. Civilization. Several useful lessons can be drawn from the SLCP experience, all pointing to the crucial, inextricable link between the institutions, incentives, and ultimate success of a programme. Decentralisation under the SLCP focused disproportionately more on distributing responsibilities than on fostering a local sense of ownership, causing the programme to expand too fast in its Phase I and first half of Phase II (1999 -2005) at the cost of its budgetary burden, its democratic character and effective targeting. Recognising the trade-offs inherent between scale and targeting, the critical importance of the latter should not be understated, as revealed by its connection with the SLCP’s unintended, negative impacts on the environment (ie water shortages, decreased biodiversity) and local livelihoods (ie lower incomes, higher inequality, disempowering of nonparticipants). Therefore, implementation, including compensation, should be sensitive to local heterogeneity and be guided by a management strategy that is flexible, inclusive and responsive to feedback (Yin et al. , 2014 a). Beyond implementation, scaling up a program of such magnitude requires a strong focus on the initial phases of planning, demonstration and piloting, as well as on strong safeguards that will maintain the programme’s incentive structures long after its implementation and thus guarantee its long-term success (Yin et al. , 2014 b; Chen et al. , 2015). Fortunately, some of the lessons learned from the previous phases of the Programme have been used to re-shape the Programme. For example, in its latest Phase IV, the Programme is targeting only those who are poor, willing to convert and whose crop lands are in a steep slope (25 o in one circumstance, and 15 -25 o in another). Adaptive management is vital for the Programme’s success, yet absence of independent monitoring and evaluation might undermine its adaptive capacity in the long run. 14 Implementation: Watershared: The principles of a Watershared agreement (following the RED/AMBER/GREEN format: Red: Conflict resolution by negotiation, not prohibitions or regulation; Amber: Financially sustainable system with long-term downstream contributions, supported by NGO/donor contributions; Green: Positive rewards that act as social recognitions of the mutual benefits of upstream protection. The activities and target areas follow simple, clear guidelines to understand hydrological linkages. The Water Fund works like this: The development NGO, the Municipal Government and the Water Cooperative each invest in--and play a decision-making role in--the Water Fund. The three-institution board decides annually how money will be spent: in annual payments, in-kind support, land purchases, or whatever else. These compensation payments are paid to upstream landowners, who in turn sign contracts to guarantee land use, and (supposedly) provision of the water service.
15 Implementation. Transprarency in long value chains for carbon. Any growing tree can fix and reduce carbon emissions. But it takes a series of extra steps to make this action into a commodity that can be traded in carbon markets. Figure 1 shows how a typical Plan Vivo carbon offset project operates. A project developer works with smallholders, communities and supporting agencies to develop a project idea note (PIN). This is submitted to Plan Vivo where it is initially checked against the eligibility criteria set out by the Plan Vivo Standard. Amongst other key aspects, the Plan Vivo Standard has a particular focus on whether the project secures land tenure or carbon rights for participating communities and uses native or naturalised species in its project activities. If it fulfils the eligibility criteria, the carbon accounting methodology goes into the Project Design stage. After submission, the carbon accounting methodology is evaluated through a peer-review process and assessed by Plan Vivo’s technical committee. Successful projects go through validation and project registration. Through the submission of annual reports, projects can demonstrate compliance with their project design and monitoring targets, which will lead to the issuing of valid carbon certificates. The project developer is then able to sell these certificates in voluntary carbon markets. Regular third-party evaluation takes place to ensure the validity and permanence of carbon sequestration rates and that the proper dispersal of funds to communities in an equitable benefit sharing that is fair and transparent. 16 Implementation. Carbon and smallholder agriculture value chains. This example shows how carbon offsets can be brought alongside initiaties that support BIOGAS for smallholder agriculture. Payments for Ecosystem Services in smallholder agriculture: lessons from the Hivos-IIED Learning Trajectory. http: //pubs. iied. org/16598 IIED/ This synthesis report presents highlights from six projects which are part of the joint Hivos-IIED PES Learning Trajectory Programme in five countries – Guatemala, Indonesia, Kenya, Nicaragua and Peru – that are exploring the use of carbon projects in smallholder farming. Through this research IIED and Hivos explore the feasibility of payments for ecosystem services (PES) as incentives to promote a shift to sustainable smallholder agriculture. Results from this research are published in the Payments for Ecosystem Services in Smallholder Agriculture series. We focus on practical learning from existing smallholder and community PES projects linked to energy and agroforestry activities. Working with local partners and project practitioners, we analyse the opportunities, challenges, strategies and potential ‘no-go’ areas in a pre-selected group of smallholder projects and analyse them within the global context of wider learning on what works and what does not in PES. Based directly on lessons drawn from our partner studies, we adapt the LINK methodology tools developed by the International Center for Tropical Agriculture (CIAT), to understand if and how PES and carbon approaches can help smallholders successfully enter and benefit from existing markets. 17 Demonstrating impact. Impact are, in a strong way, predetermined at the design stage of a project. Having a clear theory of change can help to identify the steps needed to reach impact. There is no easy, one-size fits all solution to implementing CT/PES. Instruments must respond to context, and to the pre-existing institutions, rules and conditions that affect people’s behavior. In some situations, it will be impossible to ignore the poverty alleviation agenda: for example, poor people live in targeted ecosystems and could be affected or displaced. This is neither simple nor cheap, and should be actively approached with clear objectives, instruments and ways to monitor and adjust. In this Section we look at emerging systems and tools to improve the way programmes are implemented, and specially how they can be brought to achieve meaningful scales. Much of the lessons have been provided directly by practitioners engaged in the case studies presented in Module 2, through focus groups, policy workshops and literature review. Effectiveness is the change in the provision of services induced by the programme, compared to a counterfactual without CT/PES (Börner et al. , 2017). Effectiveness in the field is determined by four main factors: Programme costs – transaction and implementation costs net of PES transfers – which determine the number of contracts that can be offered for a given programme budget and payment level. Direct changes in land/resource use among participants inducted onto the programme, compared to a baseline of `no PES’ (additionality). Indirect effects (positive or negative) of the programme on land/resource use and environmental service (ES) provision outside of contracted land (spillovers). Effects that these changes in land/resource use among participants and non-participants have on the actual provision of environmental services. For example the biophysical link between induced behavioural changes in practices and the targeted ES). Scale is ultimately linked to this, for example looking at the number of project participants within the overall scale of the ecosystem. Each of these factors is, in turn, shaped by the interplay of features related to the context, design, and implementation of the programme (Figure 8, also see Engel et al. , 2015; Persson and Alpizar, 2013). The cost-effectiveness of a small-scale conservation intervention, such as Watershared, increases if there are only a few, motivated stakeholders, and such actors can play a critical role in monitoring. Most importantly, the geographical proximity of service users and providers can promote strong ‘conditionality’. If a landowner removes her trees it will quickly be obvious to their downstream counterparts. Downstream authorities have a clear (and often fiduciary) responsibility to check whether the compensation mechanisms (i. e. the development projects) have been implemented, and if watershed conservation has occurred ( Asquith, 2016) and so have a specific direct interest in all parts of the programme’s theory of change.
18 Demonstrating impact can also be difficult when projects remain small due to potential non-linearity in the relationship between actions and outcomes. Pynegar (2018) recently conducted an impact evaluation study of the Watershared programme in Bolivia, as part of his Ph. D with Bangor University. In his thesis he discusses how non-linearity can affect not only outcomes but the messages emerging from impact evaluation (Figure 10). ‘Type a’ projects show a linear kind of action-outcome relationship. ‘Type b’ projects are those where relatively small-scale implementation can quickly impact ecosystem services (or other outcomes of interest), but which then peak and remain at that level irrespective of additional enrolment. This could be for example projects that are very finely-tuned and targeted. ‘Type c’ projects show slower impact on ecosystem services initially, for example because properties are small and scattered, or not in target areas, but their impact would increase once it reaches the scales (and time) needed, for example through reaching all stakeholders within target areas. Impact evaluation will show very different results for the three projects. Conducting impact evaluation during the early stages of a Type C project will not only be expensive but could potentially show negative or insignificant results, which could be harmful if misinterpreted. It is important to be aware of the different kinds of action-outcome relationship when designing projects and evaluating impacts. Academic institutions are important partners in advancing tools for the design of CT/PES programmes and in identifying indicators and methodologies for tracking impacts. 19, 20, 21 Present the list of outputs from ESPA synthesis and plans for future engagement.
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