Transcript Division of Environmental Conventions Challenges and opportunities for payments and markets for ecosystem services based on MEAs and pro-poor approach.

Division of
Environmental Conventions
Challenges and opportunities
for payments and markets for
ecosystem services based on
MEAs and pro-poor approach
10-12 October, LSE, London, UK
• Developing countries are providing enormous
services to the world for which they are not
compensated, such as the environmental services
and preservation of biodiversity. One of those
services is in the area of greenhouse gases.
Measured by mechanisms included in the Kyoto
Protocol, the value of the carbon services
provided by the tropical countries exceeds $60
billion a year. Developing countries now propose
that they would submit themselves voluntarily to
the provisions of the Kyoto Protocol if they
received compensation for environment services.
This needs innovative financing to make it work.
– Joseph Stiglitz, Nobel Laureate in Economics
Division of
Environmental
Conventions
Pro-Poor Markets for Ecosystem Services
• Trade-offs within the MDGs
– Millennium Ecosystem Assessment report,
May 2005
• Environment not mainstreamed beyond
MDG-7
– UNDP report on implementation of MDGs in
100 countries, June 2005
• Development of new MDG-based
PRS/SDS
– Millennium Project Report, January 2005
– 2005 Summit Outcome Document, June-Sept
2005
Division of
Environmental
Conventions
Why Pro-Poor? Why Now?
• Markets for Ecosystem Services
– Markets designed to support positive
environmental externalities of a given
activity through the transfer of financial
resources (the payment) from
beneficiaries (the demand side) of the
ecosystem services (the service) to those
who provide these services (the supply
side)
Division of
Environmental
Conventions
MES- What are they?
• More than 300 MES have been inventoried
• Last 10 years
– multi-million dollar markets in carbon,
wetlands, water pollution and biodiversity
• Markets established for 4 categories of
ecosystem services:
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Carbon sequestration
Water quantity and quality
Biodiversity protection
Landscape beauty
Division of
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MES- Their Potential (1/3)
• MES have grown outside the framework
of the MEAs
– Exception: UNFCCC-CDM
• MES categories and MEAs
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Carbon: UNFCCC
Biodiversity: CBD
Water: Ramsar
Land quality per se has not been the subject of
reported transactions, but some existing
markets support the objectives of the UNCCD
through their impacts on agricultural practices
– Bundled/stacked: Other MEAs
Division of
Environmental
Conventions
MES- Their Potential (2/3)
• Promise
– Markets for ecosystem services (MES) are
promising for attracting private contributions
– If done using a pro-poor approach, could
contribute to the MDGs
• Opportunities
– Development of MES within the framework of
MEAs and their institutional and financial
mechanisms
– Take a pro-poor approach and have the MES
contribute towards achieving the MDGs
Division of
Environmental
Conventions
MES- Their Potential (3/3)
• Markets and nature of public goods
• Non-linearity of ecosystems
– Regime changes can shift ecosystems drastically and
with little warning
• Spatial variations of ecosystems and this their
values
– MES are easy to develop if issues are homogeneous
• MEA goals and MES does not necessarily
coincide
– Other instruments might be more relevant
• Equity issues
– Benefit sharing, intra-generational issues
Division of
Environmental
Conventions
MES- Issues (1/2)
• Finding right costs
– Issues related to subsidies
• Need sometime for anti-market mechanisms
– In some instances, anti market mechanisms are needed
instead
• Inter-section between private and public sectors
– Very few opportunities for interaction
Division of
Environmental
Conventions
MES- Issues (2/2)
• Raising awareness for both the buyers and
sellers
– Finding buyers
– Defining the beneficiaries
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Roles of governments
Forms of payments
Willingness to pay and willingness to do
Political support at all levels
Division of
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Conventions
MES- Challenges from the Field (1/2)
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Good governance
Building of capacity
Need for partnerships
Working with the media
Understanding the hydrology
Keeping things simple
Honest brokers
Division of
Environmental
Conventions
MES- Challenges from the Field (2/2)
• Platform for partnership (eg.Bring
MEAs, other actors to discuss areas of
synergies in the development of
PES/MES using a pro-poor approach)
• Identify elements for the promotion of
synergies in the use of PES/MES for
MEAs
– What ecosystems? - Bundling,
homogeneity, aligning MEA goals with
economic instruments, non-linearity
– Market issues
Division of
Environmental
Conventions
What’s Next? (1/2)
• Identify elements for the promotion of a propoor approach
– Equity, Compensation mechanisms (forms of
payments), Targeting the poor, Role of
government
• Create a pilot process such as:
– Ecosystem level pilot for pro-poor MES,
Identifying countries, Identifying ecosystem
services and the bundle (provisioning,
regulating/supporting, and cultural)
• Identifying Guiding Principles
– Elements of good practice, Replication, Scaling
up, Lessons, etc.
Division of
Environmental
Conventions
What’s Next? (2/2)
• http://www.unep.org/dec/
Division of
Environmental
Conventions
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