BEYOND THE CLASSICAL PAYMENTS FOR ECOSYSTEM SERVICES (PES): INTRODUCING VALUE CHAINS AND SUSTAINABLE MARKETS TO COMPLEMENT PES IN AGRICULTURAL LANDSCAPES

In recent years, there has been a boom in environmental policies using conservation incentives, aiming to create behavioral change to provide and preserve ecosystem services of high strategic value. One of the most widely used... [ view full abstract ]

In recent years, there has been a boom in environmental policies using conservation incentives, aiming to create behavioral change to provide and preserve ecosystem services of high strategic value. One of the most widely used incentives is the Payment for Environmental Services (PES). The traditional approach of this incentive is based on the idea of a payment covering the opportunity cost of the owners of the threatened forest areas. This payment comes from the beneficiaries of ecosystem services, either directly or through institutions interested in conservation. PES have demonstrated positive effects on conservation but limitations in the long term regarding its economic sustainability. Based on a pilot design of incentives for the conservation of biodiversity in the Colombian Amazon (Piedemonte region), this article presents a new approach to PES by including the establishment of value chains in agricultural landscapes that economically recognize environmental practices to complement the traditional PES. The objective of this new design is the conservation of the forest along with the transition to sustainable productive practices. This institutional design allows the articulation of producers to value chains in the long term and markets that reward their efforts in sustainability, reducing their dependence on PES in the long term. The proposed incentive system differs from traditional PES in that a central component is designed to increase the quality of the agricultural product, in this case coffee, conditioned to compliance with a minimum of forest cover. The logic behind this proposal is that agricultural productivity will reduce the pressure on the forest because the market makes the payment conditional on the maintenance or improvement of forest cover. This new incentive system generates the socio-environmental conditions for the conservation and increase of the forest cover as well as the connectivity of the forests in the beneficiated region. Additionally, it shows how it is possible for small farmers to obtain economic benefits derived from greater productivity and sustainability of their agricultural practices. The article discusses the challenges in the design of the incentive, including the role of differentiated opportunity cots based on productive activity but also size of the farm; the simulation of the associated costs of the program and the opportunities of designing a new system oriented to both the conservation of forests and rural development. In this case, compared to traditional PES, the importance of designing incentives that link conservation to the productive activities of the area is highlighted, facilitating the development of value chains linked to promote forest conservation, with an effect in the economic sustainability of the incentive. The improvement of the income of local communities is transformed into regional benefits for the conservation of the forest and protection of the water resource, and finally in global benefits due to the conservation of the biodiversity and carbon capture. Our article brings new light to the land-sharing versus land sparing debate, offering an alternative in which both productivity and conservation increase, if the incentives are correctly aligned.

PAYMENTS FOR ECOSYSTEM SERVICES, VALUE CHAINS, FOREST CONSERVATION, INCENTIVES