Presentation on theme: "Chronically Underfinanced – Mobilization of Additional Resources for Biodiversity, Workshop, 30 January 2010, Bonn Payments for Environmental Services."— Presentation transcript:
Chronically Underfinanced – Mobilization of Additional Resources for Biodiversity, Workshop, 30 January 2010, Bonn Payments for Environmental Services Examples and perspectives for the future Irene Ring Department of Economics, UFZ and Ecological Fiscal Transfers:
Irene Ring: PES and EFT – Examples and perspectives Page 2 Outline Introduction: TEEB Background Payments for Environmental Services (PES) Ecological fiscal transfers (EFT) International PES, REDD+ and EFT Conclusions
Irene Ring: PES and EFT – Examples and perspectives Page 3 About TEEB… An “Open Architecture” project… over 500 contributors across partner institutions, universities, individuals… An international and diverse “Community” of economists and ecologists… Makers of “Global Public Goods”: the TEEB Report suite Some of our key partners…. 3 About TEEB…
Irene Ring: PES and EFT – Examples and perspectives Page 4 Part IThe need for action Chapter 1 The global biodiversity crisis and related policy challenge Chapter 2 Framework and guiding principles for the policy response Part II Measuring what we manage: information tools for decision-makers Chapter 3 Strengthening indicators and accounting systems for natural capital Chapter 4 Integrating ecosystem and biodiversity values into policy assessment Part III Available solutions: instruments for better stewardship of natural capital Chapter 5 Rewarding benefits through payments and markets Chapter 6 Reforming subsidies Chapter 7 Addressing losses through regulation and pricing Chapter 8 Recognising the value of protected areas Chapter 9 Investing in ecological infrastructure Part IV The road ahead Chapter 10 Responding to the value of nature TEEB D1: TEEB for International and National Policy Makers Available at
Irene Ring: PES and EFT – Examples and perspectives Page 5 Payments for Environmental Services A voluntary transaction where a well-defined ecosystem service (ES) (or land use likely to secure that service) is ‘bought’ by at least one ES buyer from at least one ES provider, if and only if the ES provider secures ES provision (conditionality). (adapted from Wunder 2005) Broad range of schemes for various ecosystem services and land uses in many countries and at different spatial scales: Public, public-private and private schemes at local, regional and national levels. Important: regulatory baselines and additionality – PES will always be part of a policy mix!
Irene Ring: PES and EFT – Examples and perspectives Page 6 PES: Opportunities and Challenges PES can help make the value of ES more explicit and thus modify and potentially reverse incentives for resource users Sequence of measures: First, remove perverse subsidies! Voluntariness is a key feature – but legal/regulatory underpinning essential Potential to scale up existing PES, e.g. from local initiatives to national coverage, and to implement them in more countries. PES schemes face constraints: investment in information and capacity building, e.g., mapping supply and demand of ES, engaging stakeholders, training administrators PES are not appropriate everywhere: need of sufficiently defined resource tenure and use rights, equal bargaining power between stakeholders
Irene Ring: PES and EFT – Examples and perspectives Page 7 PES example: Costa Rica Among the first national PES programmes in developing countries Well-cited example, but therefore also well-studied and permanently improved Set up in 1997, it remunerates landholders for providing carbon sequestration services, hydrological services, for preserving biodiversity and landscape beauty. Source of funds: national (fossil fuel tax) and international (Norway, World Bank, GEF, KfW) – partly IPES
Irene Ring: PES and EFT – Examples and perspectives Page 8 Forest cover Time / Space Stage 1: Undisturbed/little disturbed forests Stage 2: Forest frontiers; high deforestation/ extraction rates. Stage 3: Forest mosaics with stabilised cover; (low or zero net deforestation) Stage 4: Increasing forest cover and quality due to afforestation and reforestation MACRO NATIONAL LANDSCAPE & FOREST STAND FOREST TRANSITION STAGES Challenge: Land-use transition ’path dependency’’ Sources: Flores Rodas, 1985; MINAE; FONAFIFO n.y. in Kleinn et al. 2002; CATIE David Barton, NINA.
Irene Ring: PES and EFT – Examples and perspectives Page 9 Recent review: Some propositions PES is more effective in promoting forest recovery than preventing deforestation (Sanchez-Azofeifa et al. 2003; Arriagada 2008) PES is only cost-effective in the last stages of the forest transition, in a landscape mosaic with land-use specialisation at forest stand level (García-Fernández et al. 2008) Land cover, land use and institutional contexts appropriate for PES represent a minor part landscape and biodiversity variation under threat. Protected area buffer zones play a key role in increasing PES effectiveness (Calvo-Alvarado et al. 2008) Carefully check where use of PES is most (cost-)effective! Role of spatial targeting
Irene Ring: PES and EFT – Examples and perspectives Page 10 Another Challenge: Addressing the opportunity cost of conservation of both private and public actors PES literature has largely increased in recent years Focus on the opportunity cost of conservation for land users: local private actors Largely missing: Addressing the opportunity cost of conservation for local public actors However, municipalities and local communities are important actors for implementing conservation policies at the local level (spatial planning, PAs as development obstacle) Ecological fiscal transfers as a suitable instrument: Include ecological indicators into intergovernmental fiscal transfers to the local level
Irene Ring: PES and EFT – Examples and perspectives Page 11 TaxesPublic revenues Distribution to state and local levels Fiscal transfers to the local level e.g., Governmental levels in the German or Brazilian federal systems: Federal States Local Intergovernmental fiscal transfers
Irene Ring: PES and EFT – Examples and perspectives Page 12 Substantial source of income for municipalities: 30% in West-Germany, 50% in East-Germany Not considered: Ecological services involving spatial externalities: spillover benefits Urban agglomerations Rural and remote areas Fiscal compensation today: Fiscal transfer systems to the local level
Irene Ring: PES and EFT – Examples and perspectives Page 13 Ecological fiscal transfers – Experiences Portugal: since 2007, under investigation Brazil: since 1992, has gained positive experiences with ecological fiscal transfers: ICMS-Ecológico Compensation for land-use restrictions Incentive to create and maintain protected areas * or commonly also called: Ecological value-added tax
Irene Ring: PES and EFT – Examples and perspectives Page 14 States with ICMS-E legislation in Brazil (2008) Ecological indicators “Conservation Units”: officially registered protected areas for nature and biodiversity conservation Watershed protection areas Solid waste disposal Sanitation systems and sewage disposal Slashing and burning control Soil protection Local environmental policy
Irene Ring: PES and EFT – Examples and perspectives Page 15 Paraná: Increase in conservation units Protected areasUntil 1991 [ha] Created after 1991 [ha] Total by 2000 [ha] Increase [%] public Federal State Municipal private/mixed APA RPPN Other Total APAs (Environmental Protection Areas) can be designated at federal, state or municipal level. RPPNs (Private Natural Patrimony Reserves) can be designated at federal or state level. Source: May et al. 2002; Ring 2008
Irene Ring: PES and EFT – Examples and perspectives Page 16 Paraná: 1994 – Mio. R$ annually06/2001: São Paulo: 1994 – Mio. R$ annually R$ 1,00 = Minas Gerais: 1998 – Mio. R$ annually US$ 0,41 Paraná: Piraquara (100% water reserves + CUs): local income increased by 84% until 1995 São Jorge do Patrocínio (52% CUs): 71% of ICMS transfers based on CUs (2000) Minas Gerais: Marliéria (55% CUs): 68% of ICMS transfers based on CUs; Increase of transfers from R$ (1995 before ICMS-E) to R$ (1996 after implementation of ICMS-E) Fiscal effects of ICMS-E on municipal budget
Irene Ring: PES and EFT – Examples and perspectives Page 17 Consideration of conservation areas within the intergovernmental transfer system to the local level – possible scenarios: Set aside a definite budget in advance and allocate according to share of conservation units within municipal territory Brazilian model: Consideration of conservation units as part of the additional approach to allocate lump-sum transfers (analogous to area, pupils, etc.) Alternatively: Corresponding scenarios are calculated at UFZ for the Free State of Saxony Transfer potential of Brazilian model to Germany
Irene Ring: PES and EFT – Examples and perspectives Page 18 KFA Saxony Scenario 1: Lump-sum transfers considering conservation units Percentage change of general lump-sum transfers in Saxony GIS: A. Kindler & H. Hartmann 1 ha Conservation unit = 1 inhabitant
Irene Ring: PES and EFT – Examples and perspectives Page 19 KFA Saxony Scenario 2: 90 Mio. € set aside for conservation Relative change of unconditional conservation transfers and lump-sum transfers in Saxony [%] GIS: A. Kindler & H. Hartmann 90 Mio. Euro set aside for conservation (corresponds to compensation of road burden)
Irene Ring: PES and EFT – Examples and perspectives Page 20 Ecological fiscal transfers: A promising way to go? 1.International transfers (IPES), e.g., Indonesia: Role of local governments in forest conservation. Need to combine REDD and fiscal transfers to the local level based on cost and benefits of forest conservation. 2.National scale, e.g., Portugal, communal financing law Since 1 Jan. 2007: introduced Natura 2000 and other protected areas as indicators for fiscal transfers from the national level to municipalities. 3.State level, e.g., the ICMS-Ecológico in Brazil, acknowledging conservation units for redistribution of state value-added tax revenues to local governments
Irene Ring: PES and EFT – Examples and perspectives Page 21 Conclusions: Challenges and prospects PES Transfer and upscaling of successful schemes Consider constraints, policy mix and check applicability Ecological fiscal transfers Adress local governments in their role for biodiversity conservation and protected area management Brazil/Portugal: Transferability of approach to other countries International PES and national REDD(+) implementation combine biodiversity conservation & climate mitigation policies careful checking of co-benefits go for broader range of actors and instruments do not forget local governments – role of ecological fiscal transfers!