Private sector involvement key in integrating PES into environment programmes

Oct 27, 2014

Ms Almaz Gebru (in orange) Country Director, UNDP Uganda speaking to participants at the meeting about the benefits and challenges of integrating payment for environment services (PES) in to programmes (Photo: UNDP Uganda 2014)

More effort is needed to strengthen local institutions and to engage the private sector to ensure the long-term sustainability of payment for environmental services (also known as PES) - an increasingly popular conservation and resource management tool in developing countries.

This was one of several key lessons learnt that was shared in a meeting organized by the UNDP Country Office in Uganda, on the 27th October 2014 in Kampala.

Mr. Assan Ngombe, Programme Specialist, UNDP Regional Environment Project based at in Addis Ababa, Ethiopia, said that the meeting, is part of a study tour meant to expose UNDP country office environment experts to programming practices for PES, and includes representatives from Uganda, Ethiopia, Mozambique, Swaziland, Tanzania, Zambia, and Zimbabwe. Many of these countries are already piloting PES programmes such as Uganda and Ethiopia while others are about to embark on new programming cycles that will incorporate similar schemes. Over the last three years, the UNDP Regional Environment Project (Management of Environmental Services and Financing for Sustainable Development) in the Regional Bureau for Africa, has been exploring ways of how to use PES as a tool for both social and economic wellbeing of people and for environmental conservation.

In his introductory remarks, Mr Onesimus Muhwezi, Team Leader, Energy and Environment, urged participants to use the tour as a platform to learn and share experiences of integrating PES in programme activities, and the opportunities presented by PES schemes to local communities, including mobilization of technical and financial resources from GEF, private sector and other non-state actors.

Payments for environmental services (also known as payments for ecosystem services), are payments to farmers or landowners who have agreed to take certain actions to manage their land or watersheds, for example, replanting trees, keeping living trees standing or by using different agricultural techniques. These payments are usually made by the beneficiaries of the environmental services, such as, water bottling companies, or hydropower companies, and in other cases, national or local governments who pay on behalf of their citizens.

During the meeting, case studies of similar initiatives were shared by participants, key among them, the Communal Areas Management Programme for Indigenous Resources (CAMPFIRE) community-based natural resource management initiative in ZImbabwe that is offering many rural communities with livelihood options by leasing out trophy hunting concessions for wildlife to foreign hunters.

Mr. Paul Hatanga, shared findings of a UNEP-GEF four-year pilot project, "Developing an Experimental Methodology for Testing the Effectiveness of Payment ofor Ecosystem Services to Enhance Conservation in Productive Landscapes in Uganda".

Jointly funded by the United Nations Environmental Programme (UNEP) and the Global Environment Facility (GEF) the project has successfully demonstrated that it is possible to increase conservation efforts on private land, while at the same time addressing deforestation threats in areas of declining chimpanzee habitats in the districts of Kibaale and Hoima in Western Uganda.

“We were able to prove that payment for ecosystem services, has potential to deliver measurable social and environmental benefits, but there is need to address also the legal and policy issues around the system, and make it more attractive to farmers or landowners who are willing to give up other more profitable uses for their land ,” said Mr. Hatanga, a Conservation Officer with the Chimpanzee Sanctuary and Wildlife Conservation Trust (CSWCT) which jointly implemented the project with the National Environment Management Authority (NEMA) of Uganda.

Ms Pauline Nantongo Kalunda, Executive Director, the Environmental Conservation Trust of Uganda (ECOTRUST) presented a case study of a PES pilot funded by the UNDP Regional Bureau for Africa, currently being implemented in the Mt. Elgon area in Eastern Uganda.  Anchored on the Trees for Global Benefits, the project has a membership of 3000 smallholder farmers who have voluntarily set aside land collectively totaling to 5000 hectares for conservation. Individual farmers who achieve their targets in the carbon off-set scheme, receive carbon payments as an incentive to grow the trees.

“The project aggregates credits generated across multiple land holdings which are then sold to multiple buyers on the voluntary market,” Ms Kalunda said.

However, she explained that the carbon payments tend to be quite small, and a smallholder farmer may not realize much profit. To help motivate farmers, they are encouraged to initiate other income generating activities that do not degrade the environment such as bee keeping to complement the carbon payments.

Still, a number of obstacles persist such as the insecure land tenure in the region, the fluctuation in price, as well as the unpredictable demand and supply of the carbon credits which remain major obstacles to community participation in the scheme. To address these challenges, a carbon bank has been set up with an inbuilt risk insurance policy that allows for purchase of carbon credits before identifying actual buyers.

“This financial mechanism allows us to use the market to recoup investment, recapitalize and expand participation and diversity and this is helping to motivate more farmers to engage in activities that generate sustainable incomes while reversing degradation,” revealed Ms Kalunda. She added, “as a result, many farmers in these communities have thrived, and have used their earnings to improve their lives, and access better services”.

Mr Francis Ogwal, the Government of Uganda Focal Person for Biodiversity at NEMA revealed that several attempts have been made to engage private sector buyers in the country armed with the data generated by the Chimpanzee project but their response has not been very positive.

"Engagement with the private sector is a long-term investment. While we should continue to pursue all avenues to engage them, let us also think of other solutions,” he advised.

In her welcoming remarks, Ms Almaz Gebru, Country Director, UNDP in Uganda, described PES as one of the key “smart” options currently available for sustained environmental finance and management in addition to offering tangible livelihood options for rural and impoverished communities.

“Our responsibility, as development experts, is to choose appropriate technical and management methods that will both deal with the poverty problem, foster equality and ensure sustainability”, she said.

In their discussion, participants noted that the voluntary approach adopted for most of the PES community projects appears to be more acceptable to potential participants than traditional regulations implemented by government, as both parties tend to see the gains from these schemes. However, more effort is needed to disseminate and share existing knowledge on PES schemes to inform policymakers, practitioners and potential private sector investors in the region.

As a way forward, participants agreed to integrate PES in government policies and laws such as the Environment Management policy and Act as well as Local Government development plans and budgeting processes; get private sector on board; increase negotiation capacity of local communities engaged in PES and to integrate public and private models in developing and implementing PES projects and programmes. At the local level, there was need to encourage synergies between PES and other agricultural related projects through encouraging beneficiary farmers to participate in knowledge sharing meetings, farmer exhibitions and exchange visits.

For more information contact:

Daniel Omodo McMondo, Programme Analyst, Energy and Environment Unit, UNDP Uganda. Tel: +256 417 112100 Cellphone: 0716005140. Email: daniel.omodo@undp.org

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