INTERNATIONAL UNION FOR CONSERVATION OF NATURE

Legal Frameworks for Payment for

Ecosystem Services Schemes

Payments for Ecosystem Services -

Towards an Implementation Strategy

Workshop 14-16 December 2010

Isle of Vilm, Germany

John Costenbader, Legal Officer, IUCN Environmental Law Centre

1. Weighing options

2. Scaling up

3. Refining goals

Flow

3

Role of Legal Frameworks in PES

(1) Weighing Options:

4

Potential PES Legal Instruments

• Constitution

• Sectoral laws and indirectly relevant laws

• Specific (P)ES law:

(1) Weighing Options:

Content of PES Provisions

• Introducing national PES vision

– Regulations on cross-cutting purpose and scope

• Clarifying terminology

– ‘ecological’ (ES) vs. ‘environmental’ services

– Different types of ES / PES

• Financing regulations

– PES funding sources – taxes, etc.

– Percentage to be dedicated to PES

– Establishment of special PES fund

– Aggregating various resources, bundling services

(1) Weighing Options:

Content of PES Provisions

• Institutional regulations

– Duties and authorities

– System of checks and balances

– Harmonization of relation between institutions

• Implementing regulations

– Contractual

– Safeguards for benefit-sharing

– Property rights and tenure

– Land use planning

– Compliance and enforcement issues - MRV

– Legislative conflicts

(1) Weighing Options:

Iterative Development of PES Frameworks

(2) Scaling Up:

Role of Property Rights for PES

• PES to date usually on private land, and PES literature

mostly considers payments to individuals… but…

– PES can encompass a wide array of benefit

arrangements, including national-subnational

(e.g., Inter-Governmental Fiscal Transfers)

– Around 80% tropical forests de jure state forest, and

many other areas community or unassigned forest

• Exclusivity of land tenure difficult

• Competing, conflicting claims, nonformal systems

(2) Scaling Up:

Property Rights Solutions

(2) Scaling Up:

Property Rights Solutions

• Referring not only to ownership

– Allow participation of access & use rights holders

• Establishing registries

– In practice, often difficult; could bottleneck PES if

pursued as sole method

– But potential co-benefits from ongoing registration

processes

• Trying alternative methods

– Recognizing de facto property rights

– Bypassing property rights via provision of services

(2) Scaling Up:

Benefit-Sharing

• Key feature of PES is conditionality of payments on

provision of environmental services

– Timing and size of benefits key to conditionality

– Dynamic opportunity costs of alternative land uses

important to reflect in PES regulations/contracts

• Under REDD+, PES benefit-sharing regulatory

arrangements may build on existing regional tendencies:

• Latin America: strong mixed private project-public

PES system frameworks in place

• Africa & Asia:

• Participatory forest management (JFM / CBFM)

• Forest concession revenue-sharing

(2) Scaling Up:

National or Sub-National Frameworks

(2) Scaling Up:

National Sub-national

Coherence PES programmes synchronized

with national programmes

Individual PES responses to regional

& local needs

Homogeny Standardized PES units and

procedures

PES criteria tailored to unique local

circumstances

Vertical

integration

Coordination with regional &

international scale initiatives

Local stakeholder participation in PES

project decisions

Efficiencies Standardized criteria for

allocating human and financial

resources

Little bureaucracy saves on

transaction costs and allows

flexibility

Effectiveness In-country leakage minimized Local information supports effective

PES project execution

Integration of PES and REDD+ Frameworks

PES REDD+

Buyers Local buyers (e.g. water

utilities, dam operators)

can be legislated

International

contributors/buyers must be

attracted

Prices Set by local studies Set by global market

Funds Co-mingling of different ES

funds (water, eco-tourism)

Funds for REDD+ activities

kept separate with agreed

safeguards

Voluntarity VN companies mandated

to buy ES

REDD credits sold only

according to international

market demand

Example: Challenges to PES and REDD+ integration in Vietnam

(2) Scaling Up:

Promoting Co-Benefits

• Experiences from REDD+: Proportions of REDD+ funds potentially

allocated to forest-losing countries to:

A – minimize carbon emissions

B – minimize loss of forest vertebrates

From Venter 2009, Science – ‘Harnessing Carbon Payments to

Protect Biodiversity’

(3) Refining Goals:

Promoting Sustainable Development

(3) Refining Goals:

• Benefits should target poor/marginal or they risk receiving

insignificant benefits or may even be negatively affected

• Sustainability of PES schemes:

– What next after termination of a PES (e.g., servitude?)

(c.f. non-regression principle in international law)

• As regards North-South PES especially, much could

depend on whether we really see PES as more:

– Development subsidy?

OR

– Service contract?

Future Challenges

• PES as one instrument among many to conserve ES

– Auxiliary role for ‘fines & fences’ conservation law

• PES-related laws and regulations need to:

– Promote integrated ES approach in different planning

processes

– Facilitate efficient bundling of ES and participants

– Adjust institutional frameworks to improve governance

of ES across sectors and agencies

– Integrate with and enhance co-benefits from

international financing

(3) Refining Goals:

Related recent work from IUCN-ELC. . .

www.iucn.org/law

Thank you for your attention!