Payment for Environmental Services, a promising new tool to sustain long-term green investments

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The African Development Bank launched on Tuesday, June 9, its report, Payment for Environmental Services: A promising tool for natural resources management in Africa, the first of a new AfDB-Climate Investment Funds knowledge series. The report details the tool’s potential to improve natural resources management efficiency, ensure the flow of environmental services for the businesses and infrastructure that rely upon them and establish new sustainable finance for conservation.

Simply stated, Payment for Environmental Services (PES) is an incentive offered to farmers or landowners in exchange for their adoption of specific practices which enhance the production of a specific environmental service.

Mismanagement, conflict over natural resources, and elite capture are among the challenges faced by the continent in its efforts to achieve sustainable and equitable natural resource management. PES is a promising solution, proven successful in other regions of the globe.

The report focuses on the main environmental services involved in such mechanisms: carbon sequestration and storage, biodiversity conservation and watershed protection. Given its potential to contribute to the AfDB’s goals of green and inclusive growth, the Bank has already promoted the use of PES as an implementation mechanism for carbon sequestration in the context of the Forest Investment Program and the Congo Basin Forest Fund.

Kurt Lonsway, Manager of the Environment and Climate Change Division at the AfDB, stated at the launch of the report, “Although we are still far from tapping the full potential of this new tool, we are particularly interested in its capacity to strengthen the sustainability of AfDB-supported projects in the field of natural resource management and to provide much-needed additional sustainable financing for conservation. We believe t is crucial to gather and share the lessons learned and build an agenda for PES development in Africa.”

Indeed, as highlighted by the three case studies in the report, specific measures are also required to make PES work in the African context, and there is a need to take time to build understanding, awareness, trust and capacity among stakeholders during the development of such mechanisms.

PES is still a new concept in Africa and its development will therefore require the establishment of enabling institutional frameworks, in particular through clarification of land tenure, support to local communities’ organizational capacity and the setting up of legal, institutional and fiscal mechanisms to generate new public and private funding for conservation.

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