Payments for Environmental Services: an Alternative to Logging in Indonesia?

A new report published in Ecological Economics suggests that payments for environmental services (PES), unless properly targeted, are ineffective at curbing forest loss.

The report suggests that PES schemes will put some communities inhabiting tropical forests in a better 'bargaining' position for property rights with loggers, rather than encourage conservation initiatives. In many cases, even if PES schemes offer more money than logging fees, local communities are ill-equipped to prevent deforestation by loggers anyway, rendering the PES impotent at preventing forest loss. The study recommends that PES schemes target communities that would not otherwise conserve the rainforest.

Other research has suggested that user-financed schemes (such as local water companies) are better equipped to ensure conditions are met than government funded schemes, as greater consideration of local conditions are made and projects are conducted more efficiently. However in terms of carbon sequestration, government-financed schemes are the only option.

If the current rate of forest loss continues in Indonesia, it is predicted that all of the lowland forest will be lost by 2010, flying in the face of global agreements at the Convention of Biological Diversity to reduce biodiversity loss by 2010. Thus it is critical that PES schemes effectively target appropriate beneficiaries when implemented rather than be used as a blanket scheme targeting all communities.

BES members and readers of the blog are invited to comment on the usefulness of PES schemes.