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In the face of an environmental crisis in Africa and elsewhere, one thing is clear: nature provides man with an abundance of essential services which must be preserved.
Take for example the case of tropical forests. Frequently referred to as the "lungs of the planet," they regulate the climate by storing carbon while sheltering half of the global land biodiversity and protecting local water resources. The economic value of these so-called "environmental" services is gradually becoming understood and new instruments are being put in place to ensure their supply.
In Tanzania, in the East Usambara Mountains, the local water utility company for the city of Tanga (300,000 inhabitants) deemed it cost-effective to invest in conservation of the drainage basin which provides its water supply. It finances support to the communities upstream of the catchment for the latter to implement soil conservation measures - reforestation, terrace farming, agro-forestry - that help stem erosion as well as improve agricultural production.
The Tanga-Uwasa company in effect understood that deforestation and the unsustainable farming practices of these communities were behind the problems of sedimentation and nutrient overload in the water it was using. Erosion had reduced the storage capacity of its main reservoir by 25% and the annual water treatment costs had doubled between 2005 and 2010 to more than EUR 200,000. The company, therefore, decided to invest an equivalent amount between 2013 and 2016 to finance soil conservation measures.
While lagging slightly behind other regions of the world, particularly that of Central America, such "win-win" scenarios are increasing in Africa. Since 2008, outside Amboseli National Park in Kenya, at the foot of Mount Kilimanjaro, Maasai land owners have been receiving annual payments (about EUR 12 per hectare) to maintain land usage and practices compatible with the movement of elephants toward the neighbouring protected area of Chyulu Hills.
These payments are funded by the government, development agencies and a tourist operator upon which these activities depend. Elsewhere on the continent, rural populations receive financial incentives from carbon markets to preserve the forest or to plant trees, as has been the case since 2003 in Uganda through the "Trees for Global Benefits" programme run by the NGO Ecotrust.
These innovative initiatives, known as "Payment for Environmental Services" (PES), build on a contractual logic. Their attractiveness lies in their capacity to mobilise new sources of financing for conservation, benefit the local populations and improve the cost-effectiveness of conservation actions. The latter objective is linked to the principle of payment for results: rather than financing activities which aim to obtain results, it seems more profitable to pay directly and conditionally for achieved results. For the aforementioned three reasons, PES development in Africa seems promising.
However, to take full advantage of such innovative initiatives, African countries must implement suitable institutional frameworks. Land tenure clarification is a major challenge while exclusive land rights are rare (given that the government is often presumed to be the legal land owner) and land conflicts are numerous.
It is also necessary to build the organisational capacity of local populations and to establish the needed legal, institutional and fiscal mechanisms to generate new sources of financing for nature conservation. Climate finance, which is central to international negotiations expected to culminate in a global climate agreement in Paris by the end of the year, is particularly relevant. PES could allow for better access to these funds which would then be channelled to the local populations.
The Need for Environmental Laws
There is also a need to be realistic with respect to the potential of PES. Establishing such initiatives is costly and takes time. Ignoring them creates exposure to a certain number of risks: increase in land conflicts, land grabbing by the local elite and creation of perverse incentives (putting an end to objective conservation).
Lastly, PES is far from being the most suitable solution for all environmental problems. Strengthening the enforcement of environmental legislation in Africa remains a priority in order to limit illegal logging, for instance, or the ivory trafficking which reached record levels in recent years and has decimated the elephant and rhino populations of the continent.
Kurt Lonsway is Manager of the Environment and Climate Change Division of the African Development Bank.
Thomas Legrand is co-author of the study "Payments for Environmental Services: A Promising Tool for Natural Resources Management in Africa", published by the African Development Bank in June 2015.
The PES publication is available here.
This article was first published in June 2015 in Le Monde Afrique.