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Policy Brief 8. Payment for environmental services

Policy Briefs on the management of natural resources and institutional strengthening for disaster risk reduction in the context of climate change









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    Project
    Payment schemes for environmental services in watersheds 2004
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    Payment schemes for environmental services (PES) are innovative instruments for natural resources management which are increasingly being applied in Latin America. In a watershed context, PES schemes generally involve the implementation of market mechanisms to compensate upstream landowners in order to maintain or modify a particular land use that is affecting the availability and/or quality of the water resources for downstream users. The Regional Forum on Payment Schemes for Environmental Serv ices in Watersheds was held during the Third Latin American Congress on Watershed Management (Arequipa, Peru, 9–13 June 2003) to exchange experiences with these schemes in Latin America and to formulate recommendations for the economic valuation of water-related services, as well as the design and execution of PES schemes in watersheds. This report summarizes the lessons and recommendations of the forum. The complete documentation, including 19 papers, 22 presentations and case studies, is inclu ded on the CD-ROM that accompanies this publication.
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    Book (series)
    Forests and water
    A thematic study prepared in the framework of the Global Forest Resources Assessment 2005
    2008
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    The availability and quality of clean water in many regions of the world is more and more threatened by overuse, misuse and pollution. In this context, the relationship between forests and water must be accorded high priority. Forested catchments supply a high proportion of the water for domestic, agricultural, industrial and ecological needs in both upstream and downstream areas. A key challenge faced by land, forest and water managers is to maximize the benefits that forests provide without detriment to water resources and ecosystem function. There is an urgent need for a better understanding of the interface of forests and trees with water and for embedding this knowledge in policies. This study, initiated in the context of the Global Forest Resources Assessment 2005, highlights the need for holistic management of complex watershed ecosystems taking into account interactions among water, forest and other land uses as well as socio-economic factors. It explains the role of forests in the hydrological cycle, with a particular focus on critical, “red flag” forest situations such as mountainous or steep terrain, river and coastal areas and swamp ecosystems, as well as the special case of mountainous small islands. It addresses the protection of municipal water supplies and emerging systems of payment for watershed services. This state-of-knowledge publication will be of interest to a broad range of technical experts, scientis ts and decision-makers.
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    Article
    Climate change, forest restoration and payment for ecosystem services
    XV World Forestry Congress, 2-6 May 2022
    2022
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    Payment for Ecosystem Services (PES) is an innovative approach towards tackling climate change by using financial incentives to reduce emissions from deforestation and degradation. The paper deliberates upon PES approach to forest restoration and various contexts in which it has been applied. An important need is to be flexible and adapt to lessons learned and changing circumstances. PES can concomitantly benefit buyers and sellers and improve the resource base. Costa Rica pioneered PES by establishing a programme of payments. Its 1996 forestry law explicitly recognizes four forest ecosystem services: carbon fixation and sequestration, hydrological services, biodiversity protection, and scenic beauty. Through financial and legal mechanisms, beneficiaries of forest service compensate those who protect them. Indian judiciary instituted a compensatory afforestation mechanism. It collects funds from buyers to finance the restoration of forests and related ecological and aesthetic landscapes. This mechanism moved into implementation mode about 10 years ago with a corpus fund of over 2.2 billion US dollars and to release resources for forest restoration equal to the interest earned. Drawing upon case studies, the paper concludes that PES potential to concurrently support sustainable development and forest restoration depends upon governance system and design of payment schemes. Since climate change shall impact the capacity of forests to provide vital ecosystem services, the projected socio-economic consequences will be severe, more so for forest-dependent communities vulnerable to climate variability. PES strategies and schemes thus need to be designed to promote holistic and contextual approach to forest restoration, ecosystem services, human wellbeing and climate change adaptation andmitigation. Keywords: Climate, Ecosystems, Economics, Finance, Forests, PES ID: 3486186

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