Marcela Quintero CGIAR SEMINAR SERIES Payments for Ecosystem Services: Win-Win Solutions? Co-organized by IFPRI, the CGIAR, and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) Session at Tropentag 2023 SEP 21, 2023 - 7:45 TO 9:15AM EDT

1. Payments for Ecosystem Services
What, Where and How?
Marcela Quintero
Associate Director General – Research and Innovation
Alliance of Bioversity International and CIAT
Senior Director – Land & Environment
CGIAR
Berlin, 21 September, 2023

2. Payment/Rewards for Ecosystem Services
• Voluntary transactions between
service users and service providers that
are conditional on agreed rules of
natural resource management for
generating offsite services (Wunder,
2015)
• Transfer of resources between social
actors, which aims to create incentives
to align individual and/or collective land
use decisions with the social interest in
the management of natural resources
(Muradian et al. 2010)
• High efforts on facilitation and
negotiation required to reach a PES
agreement
• It is about reciprocity and trust
building
• Main focus of PES is on
environmental outcomes, thought
there could be other co-benefits
(e.g. poverty alleviation)
What it is?

3. Emerging evidence on key factors for the implementation of
PES
FEASIBILITY
DIAGNOSTIC
DESIGN
NEGOTIATION
IMPLEMENTATION
 Land tenure
 Willingness to pay/to accept
 Institutions and organizational capacity
Key for the adoption and environmental effectiveness of PES (Borner, et al. 2017)

4. Key/desired aspects in the design and implementation
of PES
Design
• Funding horizons (recurrency of payments)
• Defining funding sources
• Private: financial instruments to provide stability to
payments
• Public: legal context, could provide more stability to
payments
• ES provision cost -> differentiated payments
• ES modeling -> definition of service-providing
activities that will condition payments
• Targeting of service providers
Implementation
• Setting up of PES institutional arrangements
• Payment’s collection processes
• Payment's disbursement
• Monitoring
• Enforcement

5. Overcoming bottlenecks for the implementation of PES
2013 2015
2021
(17) (22) (54)
Case of Peru
Progress catalyzed by the creation of a legal framework for PSE and a specific law ruling
to collect payment through the potable water tariff
(Tristan et al. 2021)

6. Environmental performance of PES
• PES compliance (and the few existing impact evaluations) based
on land use/management decisions compliance
• This is a not a problem if land use/management options
selection was based on solid evidence regarding land use/ES
causal relationship.
• The existing impact studies have shown from small to large
impacts, very few ones found none positive impacts.
• PES effective at local levels (deforestation rates reduction)
(Latin America and Africa)
• Adverse participants selection led to marginal environmental
impacts -> areas with low opportunity cost
• Land use decisions are also affected by other non-PES factors
• Few evidence on permanence (and reasons for) of land use
decisions after discontinuity of PES. Emerging evidence shows
permanence of these decisions (e.g. Ecuador and Colombia).

7. Poverty performance of PES
• Available studies in Costa Rica, Mexico, Mozambique and China reported no
negative welfare effects (Arriagada et al, 2015; Hegde and Bull; 2011, Uchida et
al., 2007; Borner et al. 2017)
• PES livelihood impacts assessments reported more positive impacts (especially
financial impacts) than negative ones (46 studies) (Blundo et al. 2018).
• PES main focus is not poverty alleviation. Pro-poor motivations should not reduce
some key design features of PES design
• Trade-offs between income and other livelihood dimensions and effects on
inequality are understudied (Blundo et al. 2018, Borner et al. 2017)

8. Where to focus technical and research assistance for PES?
• Technical capacities to develop PES project tailored to
the source of funding (public vs. private)
• For water related services: Evidence on the impact of
land-use practices (restoration, conservation,
sustainable use) on the targeted ecosystem service
• For carbon related projects:
• Validation of SOC models (71% SOC models not validated
or validation contexts are not in the South or Least
Developed Countries) (Garsia et al. 2023)
• GHG calculators built with data from tropical countries:
Estimates emissions greater than measurements in 70% of
studied cases in Latin America, Africa and Asia) (Richards,
et al. 2016)
• Harness the potential of agricultural practices
(agroforestry, conservation agriculture, grass-legume
mixtures in pastures, biochar) to carbon sequestration
(Costa Jr., et al. 2022)

9. Where to focus technical and research assistance for PES?
• PES ex-post impact evaluations (lack of
capacity, resources, baselines)
• Monitoring of conditional compliance
(Wunder et al. 2028), especially in non-
carbon projects.
• Behavior change determinants (effect of
PES on reciprocity, trust building,
environmental stewardship, shaping ES
protection behavior)
• Continuous systematic assessment of
bottlenecks towards and during
implementation, in specific contexts, to
support continuous improvement of
enabling conditions
2013 - 2015
2021

10. Thanks for your attention
Marcela Quintero
m.quintero@cgiar.org