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Payment systems

Payment systems. Gerdien Meijerink. Main research issue (from KB1 proposal). How to implement a scheme of payments for environmental services, which involves linking the supply side - providing the environmental service - with the demand side - paying for the environmental service –

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Payment systems

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  1. Payment systems Gerdien Meijerink

  2. Main research issue (from KB1 proposal) • How to implement a scheme of payments for environmental services, which involves • linking the supply side - providing the environmental service - with the • demand side - paying for the environmental service – • institutional issues in the link - how services are provided, measured and paid for.

  3. Progress 2007/2008 • PhD supervisors: Erwin Bulte (Development Economics WUR) and Daan van Soest (Tilburg University) • Development of PhD proposal • Focus on different institutional arrangements for monitoring “If services are not delivered, people won’t pay” • Presentation paper at Conference European Association for Agricultural Economics in Montpellier on monitoring • Development of Case-study in Kenya: project “Green Water Credits” • How to establish a payment system to pay for soil and water conservation by many farmers • Which institutional arrangement is most effective (farmers implement required measures) and efficient (least transaction costs)

  4. Delays and problems • Due to implementation practicalities Kenya Case not possible: • No monitoring will be done • One payment system (no comparison possible) • Survey of alternative cases (in developing countries and Europe) raised similar problems: • Monitoring environmental services often non-existent in developing countries • One payment scheme used (no comparison possible) • Comparison different schemes difficult because of different environmental services involved

  5. Planned activities 2008 • Revise PhD proposal on payment systems for ecosystem services • Focus on link between supply and demand for ecosystem services • Link with KB1 project “How do people want to pay for ecosystem services” (Polman, de Blaey & Linderhof) • Literature review on different institutional arrangement for payment systems • Build on project “Innovative financing mechanisms for ecosystem services” (2007 for LNV) • Presentation paper EAAE August 2008 • “Green payment programs, asymmetric information and the role of fixed costs”

  6. Outputs 2008 • Literature review on institutional arrangements for payment systems ready • Proposal finalized and approved by SELS team and PhD supervisor (prof. Bulte) • 1 paper presented at scientific conference (EAAE) • 1 paper submitted to scientific journal (Journal for Agricultural Economics)

  7. International position in relation to this project • Sven Wunder (CIFOR) has identified two main problems of PES: • Too few service users are so confident about the mechanism that they are willing to pay — in some cases, because the link between land use and environmental services (ES) provision is insufficiently understood or ambiguous. • Poor knowledge on the institutional requirements entailing incentive and livelihood mechanisms which so far have received comparatively less attention. • Stefano Pagiola (WorldBank): first constraint is the “achilles heel” of PES • Project also fits well within work of IIED on markets for environmental goods and services

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