R EWARDING THE U PLAND P OOR (in Asia) FOR E NVIRONMENTAL S ERVICES That They Provide

1. REWARDING THE UPLAND POOR (in Asia) FOR ENVIRONMENTAL SERVICES That They Provide (R U P E S) Marian S. delos Angeles Environmental Policy Economist International Center for Research in Agroforestry (ICRAF) Southeast Asia Regional Programme Bogor, Indonesia

2. PRESENTATION INRM and research and development in agro-forestry RUPES SETTING FOR DEVELOPING MARKETS FOR ENVIRONMENTAL SERVICES: INDONESIA PHILIPPINES VIETNAM

3. 1. Participatory problem analysis Food insecurity · Increasingly poverty · Degrading natural environments 3a. Production function 3c. Human well-being 3b. Ecosystem functions · · · Quantity of food and fibre Risk management Nutrient cycling · · · Quality Participation of Carbon sequestration · · Genetic x Environment resource users in Biodiversity · matching efficiency decisions Water balance 2. INRM research (research on alternative solution) 4. Tradeoffs and options · Analysis of tradeoffs and competing interests The INRM research process -the Consultative Group on Agricultural Research (CGIAR) · Identification of ranges of flexible adaptive options 5. Outcomes 6. Feedback · Extrapolation · Dissemination · Policy implementation · Wide-scale adoption

6. cloud interception surface run-on Stream: surface run-off sub-surfacelateral inflow rainfall canopy water evaporation Forest transpiration surface evaporation through-fall stem-flow { infiltration quick- flow recharge lateral outflow uptake base flow percolation

10. WHY Programme RUPES? • Benefits and costs of conservation are borne unevenly • beneficiaries do not pay • providers do not get compensated • costs are borne by disadvantaged groups • in cases where payments are made, they do not reach the poor providers

11. Evolving Consortium • Center for Int’l Forestry Research (CIFOR) • World Resources Institute (WRI) • World Conservation Union (IUCN) • Winrock International • Conservation International • Economy and Environment Program for Southeast Asia (EEPSEA), IDRC • Food and Agriculture Organization (FAO) • national level partners • other investors

12. OUTPUTS • identification of ES in a range of settings • costs and benefits; • distribution • land use options • an array of mechanisms developed and tested with poor communities that will reward them for ES supplied • transparent enabling institutional environment • supported at various levels • awareness to enhance ES raised among government officials, producers and consumers of these services • effective partnerships among consortium members and regional, national and local organizations

13. WHICH ENVIRONMENTAL SERVICES? • watershed protection services ( WPS) • biodiversity conservation (BCS) • carbon sequestration and storage (CSS)

14. WHAT SERVICES? • watershed protection services ( WPS) • hydrological functions How much water? When? Where? What quality? • Upstream and downstream users • Transboundary

15. WHAT SERVICES? • biodiversity conservation (BC) • anthropogenic value, or human-centered • use value • consumption and production • recreation, amenity • option • non-use value • existence • bequest • intrinsic value • local and non-locals

16. WHAT SERVICES? • carbon sequestration and storage (CSS) • stocks • flows • mostly global

17. WHICH REWARD MECHANISMS for watershed protection? • market-based • tradable water rights, marketable permits • development of property rights • bilateral agreements between providers and users • revenue share from surrogate markets • electricity pricing • water tariffs • irrigation service fees • social recognition • public investments

18. WHICH REWARD MECHANISMS for biodiversity conservation? • share from bioprospecting/royalty fees • concessionary finance: • DEBT FOR NATURE SWAP (FPE) • DEVPT. ASSISTANCE (SIBP) • revenue from eco-tourism fees • direct payments for conservation easements • increased market access - eco-labeling • allocation from trust funds • tax breaks

19. WHICH REWARDMECHANISMS for carbon sequestration and storage? • revenue from payments for carbon credits/offsets • budget allocation from carbon taxes

20. WHICH GENERAL MECHANISMS? • Tenure security • Trust funds • general • specific • Cross compliance mechanisms

21. RESEARCH QUESTIONS • How can these services and their benefits be quantified? • amounts provided and how? • WPS • streamflows and water quality • erosion and sediment transport • impacts of changes in land-use • BCS • indices and scale • levels and interactions • CSS • net impact; over-all land-use

22. RESEARCH QUESTIONS • How are/will be the rewards made to the providers? • Who are the providers? • economic costs of supplying these services • financial and opportunity costs • bundle rewards for jointly provided services? • property rights • What are the amounts to be collected from the beneficiaries, if any? • Who are the gainers and how much? • valuation of benefits from using these services

23. DEVELOPMENT QUESTIONS • What form and manner of collection and reward? • mechanisms for payments • mechanisms for receiving the reward • forging agreements and NSS • monitoring of services, payments and transfers • What are the institutional requirements? • policies • types and levels of stakeholders • reducing transactions costs • (information, contracting, enforcement) • forging partnerships • establishing national facility ?

24. STRATEGY QUESTIONS • Which services, where? • Current ICRAF sites • Current IFAD sites • Sites of collaborators • What levels of engagement? • Collaboration with partners: site level & policy • international: IUCN, WRI, Winrock Int’l, CFI, CI • national: NARS governments; donors & lenders • local: communities, lgu’s, ngo’s, civil society • four years 2002-2006 • sites in Asia • Phil, Indonesia, Vietnam (tentative, level 1) • Thailand, China (tentative, level 2 • Nepal, India, etc. (tentative, level 3)

25. ENVIRONMENTAL TRANSFER MECHANISMS • Two aspects : • PAYMENT FOR ENVIRONMENTAL SERVICES BY BENEFICIARIES • REWARD TO PROVIDERS OF ENVIRONMENTAL SERVICES

26. RUPES Site Development Processes Number of action pilot sites for environmental services agreements Year 1 2 3 4 5 Total Level A sites for Implementation +3 +3 . . 6 Level B sites for Assessment 6 assessed 3 selected 4 assessed 3 selected . . . 10 No. of sites contingent on relevance, funding, partnerships

27. Fraction of poor that can potentially be reached Only feasible for exceptional cases, huge opportunities for nearly all or somewhere in between? -- - 0 + ++ +++ Net impact on livelihood security Application Domain How can we increase the likelihood of ++ impacts for many of the upland poor? Where should we start -- with the most likely ‘winners’?

28. RUPES: initial work Environmental service market development for Indonesia, the Philippines and Vietnam potentials

29. RUPES: likely location of initial work Key Statistics INDONESIA PHILIPPINES Viet Nam Population (million) 212.092 75.65 78.137 Land area Imillion has) 181.157 29.817 32.549 Pop. density (persons/ha) 1.17 2.54 2.40 Forest 2000 (million ha) 104.99 5.79 9.82 change,1990-2000 (mil ha/yr) (1.31) (0.09) 0.05 in per cent (1.17) (1.42) 0.54 Protection forest (mil has) 20 1 5.7

30. W.Coastal Mountain Piedmont Peneplain Swamp Ecological zones of Sumatra Indonesia ‘Alternatives to Slash and Burn’ benchmark areas Jambi Lampung

31. Sumberjaya, South Sumatra, Indonesia Landsat MSS 1973 SPOT 1999

32. Underlying Causes the use of fire for large scale oil palm establishment as a weapon both by large-scale companies and smallholders in conflict Slash-and-burn techniques used by smallholders for the establishment of rubber plantation ten sites; collaboration with CIFOR and EU assisted

33. Rubber seedlings can be transplanted into gaps in existing agroforests “Sisipan”

34. Clonal planting material successfully established with limited weeding in a system post slash & burn

35. fully segregated landscape fully integrated landscape naturalforest integrated, multifunctional landscape: crops, trees, meadows and forest patches intensive agriculture a b c d e f Which situation do you think is the most desirable for your country? 0 1 2 3 4 5 Why?

36. Time-averaged carbon stocks for Sumatra Natural forest 254 Mg ha-1 Rubber agroforest 116 Oil palm plantation 91 Cassava/Imperata 39 rotation Initial loss 220 Mg ha-1 Potentialgain 75 Mg ha-1

37. 120 90 60 30 -500 0 500 1000 Plant species richness (#spp/standard plot) Natural forest Rubber agroforest CRAS improved (uncertain data) PRAS improved (no data) Oil-palm monoculture (limited data) Approximate domain for smallholder agroforestry $/ha Profitability at social prices June 1997

38. Refined science and knowledge • Bio-physic • Policies Multi stakeholder dialogues Interaction resources/ landscape mosaic Land Use Filter Road , canal Negotiation Process Agreed Changes Spontaneous changes NEGOTIATION SUPPORT SYSTEM (NSS) in Indonesia: Bringing science and knowledge to the table

39. NEGOTIATION SUPPORT SYSTEM for Indonesia: Decentralization process and regional autonomy, particularly related to the distribution of NRM authorities in government levels. Localized negotiation efforts to capture local contexts State forest land delineation Recognition of Adat Rights Socialized Forest Community Management

41. PHILIPPINE SETTING Sites with entitlements • Community-based forest management: • secondary forests • Social Forestry in agrarian reform areas • Protected Areas, although delineation slow • lands of indigenous peoples with Certificate of Ancestral Domain Title • on-going process

42. PHILIPPINE SETTING • Economic Instruments: Potential Directions for Refinement • various resource user fees in Protected Areas • devise mechanism for allocating revenues from the Integrated Protected Area Fund • hydropower fees for watershed protection, recently passed Power Sector Reform Act • ensure upland providers share in revenues • on going formulation of bioprospecting fees, royalties and sharing mechanisms

43. CHAIN OF PROVIDERS (Sellers) International Agencies (GEF, WB, USAID, etc.,) providing development assistance Public Sector Investment in Environment (DENR, LGU, SCU) Private/ Business Sector (Water Districts, Hydropower Plants, Water Bottling Co., etc) UPLAND POOR Phil Setting from: H. Francisco(2002)

44. VIETNAM Social Capital: COMMUNES Increasing Market Orientation • 20 hectare, 50 year contracts forest & ag’l lands • tradeable • irrigation fees, auctions for aquaculture Land-use options flexibility: tree plantations grains aquaculture vegetables horticulture animal husbandry North Vietnam: Red River catchment tributary to Mekong River; hill tribes

45. VIETNAM Dong Cao (Hoa Binh) Watershed protection vs crop production Food security WaNuLCAS & subcatchment models, AKT &PRA, FFS Cho Don Upland Dissemination of new soil conservation techniques ToT, extension school, ‘landcare’ Ha Giang Remote upland Extension of upland development FFS and ´landcare´

46. WRI & ICRAF