International Payments for Ecosystem Services:

Challenges on the demand side

Wendy Proctor and Anna Lukasiewicz

CSIRO Australia

CSIRO. IPES – Demand challenges

Overview

• Identify the product• Match the scale of the scheme with the

motivations at that scale• Match the scale of the scheme with the

beneficiaries at that scale• Improve the motivations and interest of

beneficiaries by marketing and communicating the benefits to both product sellers (companies, NGOs, governments) and end users (consumers)

• Improve the ease of access to such schemes by setting up institutional arrangements to facilitate their uptake and consider other measures such as education and financing of demand side participants.

CSIRO. IPES – Demand challenges

Identify the product

• Ecosystem services unlike normal goods and services• Essential to quantify (measuring and valuing), market and

monitor• Linking ecosystem services to products

CSIRO. IPES – Demand challenges

Match scale and motivation

• Where the benefits occur needs to be linked to motivations at that scale

• Carbon sequestration vs. biodiversity improvements• Lessons learned from local schemes need to take this into

account

CSIRO. IPES – Demand challenges

Match scale and beneficiaries

• Need to target companies with consumers that are likely to benefit

• Some schemes will only have local benefits but can still be marketed to appeal globally

• Some schemes can be targeted to specific companies e.g.• Water improvement schemes – food and beverage producers

• Biodiversity improvement schemes – construction industry

• Scenic beauty improvement schemes – tourism providers.

CSIRO. IPES – Demand challenges

Marketing and communication

• Informing potential buyers of the benefits• Promoting, advertising, branding and bundling other benefits

(e.g. poverty alleviation)• Financial vs. non-financial marketing

CSIRO. IPES – Demand challenges

Institutional arrangements

• Provide information, brokerage, finance, support

• Reduce transaction costs• International challenge• ‘Piggy-backing’?

CSIRO. IPES – Demand challenges

Other

• Testing and experiments• Capacity building• Education

CSIRO. IPES – Demand challenges

Conclusions

Challenge Required Action

o Account for and concentrate on the international focus

o Learn from existing local schemes and consider scale issues

o Get feedback from potential international players

o International organisations facilitate, push, engage, communicate, train, broker and provide finance for such schemes

o Assess potential for existing organisations to undertake these processes

o Identify learning needs necessary for these organisations to overcome knowledge gaps in IPES scheme implementation

o Identify opportunities for the creation of new international organisations, either through amalgamation or restructure of existing bodies

o Identify the products to be marketed – measurement and monitoring needs to be addressed

o Treat ecosystem services as products to be marketed. Research measurement requirements. Engage experts in marketing to advise on marketing the products – promoting, advertising, branding.

CSIRO. IPES – Demand challenges

Conclusions

Challenge Required Action

o Identify the benefits of buying such ‘products’ – in particular the financial benefits now need to be worked on

o Research into financial benefits is required using examples from existing and hypothetical international schemes

o Market these benefits effectively by targeting the marketing to international scale companies

o Identify market segments and find out what buyers want

o Communicate the above research results effectively - in particular the financial benefits

o Reduce consumer concerns about reliability and risk of the product failing

o Regulation required also?o Consider implications of regulatory or voluntary

schemes

CSIRO. IPES – Demand challenges

Conclusions

Challenge Required Action

o Experiments and capacity buildingo Carry out experimental economics case studies

with potential participants in the IPES scheme to enhance understanding of definition of the framework and enhance capacity building.

o Training in the form of university and other courses.

o Enhance understanding of IPES schemes by lobbying universities and other educational institutions to set up training courses and degrees

o Identify other avenues of providing training and awareness programs to different actions, such as national governments and institutions to facilitate familiarisation with the IPES concept.

Contact UsPhone: 1300 363 400 or +61 3 9545 2176

Email: enquiries@csiro.au Web: www.csiro.au

Thank you

Policy and Economic Research UnitCSIRO Land and WaterDr. Wendy ProctorStream Leader, Water Sharing Water for a Healthy Country Flagship

Phone: +61 2 6246 5955Email: wendy.proctor@csiro.auWeb: www.csiro.au/group