Conceptual Framework for Building Institutions and Capacity for PES

Sara J. Scherr Forest Trends-Ecoagriculture Partners Mweya National Park, Uganda September 2005

Building Blocks for Ecosystem Services Payment and Market Creation

DRAFT – FOR INTERNAL DISCUSSION PURPOSES Identify Ecosystem Services, Buyers & Sellers

(includes assessment of both buyers’ and sellers’ goals / motivations to ensure that they are complementary)

Create Supportive Legal / Regulatory Context

(includes establishing tenure / rights)

Develop the Rules for the Market or Trading

(includes determining what is being sold, who is paying for what, etc.)

Establish Supporting Organizations & Services

(includes verification services, etc.)

Launch Markets & Payments For Ecosystem Services

Adapted from Brand, David. 2002. “Investing in the Environmental Services of Australian Forests,” in S. Pagiola, J. Bishop, and N. Landell-Mills (editors). 0 London, U.K.: Earthscan Publications.

DRAFT – FOR INTERNAL DISCUSSION PURPOSES Essential Components for Ecosystem Services Market Growth

Component 1 Component 2 Component 3 Component 4 Component 5

Public Payment Schemes Open Trading Self-Organized Private Deals Identified Ecosystem Services

(includes: ecosystem services for available for both current and future payments / markets)

Enabling Legal, Regulatory, & Administrative Context

(includes: supportive context for ecosystem service payments and markets)

Supporting Institutions

(includes: public or private entities that facilitate / oversee public funds, regulate private trade, etc.)

Engaged Local Communities & Stakeholders

(includes: communities, NGO ’s, financial institutions, businesses, government, etc.)

Flow of Market Information

Component 6 Component 7 Component 8 Component 9 Component 10

Technical Assistance

(to sellers, buyers, and other market actors

,

which includes training, education, and advising)

Financing

(for all needed components, including: ecosystem management costs, transaction costs, etc.)

Support Services For Market Actors

(such as: brokering, legal advice, measurement and valuation of ecosystem services, 3 rd party verification, accounting, etc.)

Standards and Guidelines

for Ecosystem Service Payments or Markets

Awareness of Ecosystem Service Values, Payments & Markets

(among policymakers as well as potential sellers and buyers)

Institutional and Capacity Needs Vary by Type of PES

 Simple private deals (single-buyer, single seller)  Complex private deals (multi-buyer or multi seller)  Public payments (from general revenues)   Public payments (from user fees) Cap & trade (landscape, national, int’l)  Certification

Institutional Development for PES in E. and S. Africa –Initial Ideas

 Network for PES in East and Southern Africa  Meetings with thematic focus for capacity-building  Web-enabled discussion groups and exchanges  Sub-network of community organizations  Advisory support for institutional innovations   Resource and capacity-building materials Develop “Best Policy/Practice Guidelines” for selected types of PES  Policy and Buyer Dialogues

Existing Initiatives for PES Institutional Development in Africa

 World Bank West Africa project  World Bank Capacity-building  BioCarbon Fund support for carbon projects  CARE/IIED/WWF Watershed project network  Ford Fdn initiative on equity issues in PES  UNEP/FAO/ICRAF initiative on CDM  GEF/UNDP/Forest Trends/Katoomba Group  IFAD  +++