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22. Environmental services promoting rural development

Full Title:

Payment for Environmental Services as a Mechanism for Promoting Rural Development in the Upper Watersheds of the Tropics

Download project proposal [PDF 1,615Kb]

The Andean mountains contribute to the quality of life in the surrounding cities and ecosystems by providing environmental services and amenities. However the welfare of the rural populace in the region has declined significantly over the last decade. The price of agricultural products has decreased and so have investments in the rural sector. This has led to high levels of un- and underemployment. Research conducted within this project aims to analyze the social and environmental externalities generated by changing land-use patterns in the mountainous regions in order to explore, and thus provide a basis for policy decisions on, whether payment for environmental services (PES) and subsequent local investment may prove an effective mechanism for generating dynamic development in the rural sector.

The project will be executed by 40 researchers, from national and international centers and private institutions, who are considered by the partners of CONDESAN to be leaders in priority research areas in Latin America. The researchers will work in eleven carefully selected pilot sites that are associated with ongoing development projects.

The research focuses on:
•           A biophysical analysis of the watershed to describe the behavior of the Hydrologic Response Unit (HRU).
•           Quantitative analysis of the environmental and social externalities based on water balances, greenhouse gas balances, biodiversity, and the physical and economic productivity of the production systems.
•           Prioritization of the HRU by means of analysis of several distinct scenarios for land use, selecting those that provide positive potential impact in productivity and externalities.
•           Development of novel means of participation to analyze asymmetries in both the use of, and access to, natural resources and also the exercise of power and authority. This analysis will improve the implementation of PES and the land-use planning.
•           Creation of integrated economic platforms by means of strategic alliances between producers, government agencies and the private sector, and focusing on making the poorer producers more competitive.
•           Eco-regional analysis of the social and biophysical performance of the HRU and its relationship to the externalities generated in the humid, semi-humid and dry Andes.
•           Evaluation of limitations to this approach quantifying the economic benefits by using the externalities as the engine for development.
•           Extrapolation of the methods and analysis to watersheds in Africa where initiation of schemes for payment of environmental services is barely in its infancy.

The WF&CP will provide 36 percent of the total resources needed to execute the project. The remaining 64 percent will be provided by local organizations. At least half of the counterpart resources will be invested in activities promoted by strategic alliances and playing a critical role in determining the dynamics of externalities in the development of the watersheds.

Other proposals in the Andean watersheds, intercede in them with very narrow specific topics or they cut across all the watersheds of the W&FCP. This situation is reflected in the limited resources earmarked for the Andes. Proposal No.132 will contribute to a full analysis of the overall system of Andean watersheds and will provide the biophysical information needed to complement other social approaches.