3ie Funded Evaluation, OW2.154. A link to the completed study will appear here when available.
Interest is increasing worldwide in payment schemes that reward individuals, communities and projects for conserving ecosystem services. Payments for ecosystem services (PES) programmes are appealing because they offer economic incentives for environment and development gains. However, despite widespread interest and investment in such services, surprisingly few programmes have been evaluated carefully. Uganda’s National Environment Management Authority and the International Institute for Environment and Development, along with local partners, plan to implement a PES programme that provides financial incentives to local communities for conserving biodiversity in important forests located on privately owned land in western Uganda. The study will randomly select 400 local landowners (from a sample of 1,055 potential programme beneficiaries from 89 villages) and invite them to conserve forest areas on their land for at least 3 years in return for financial compensation. The pilot project will be implemented in Hoima District (a rural area) in central Uganda. Sampling will be done at the village level. This will enable the identification of local (within-village-level) spillovers. To measure such spillovers, the evaluation seeks to collect information on neighbours of both treatment and comparison landowners. To ensure that the programme targets those landowners with the lowest opportunity cost to conserve, the project will explore a variety of mechanism designs, including survey-based calculations of opportunity costs as well as silent auction designs. The latter approach enables ranking of landowners’ willingness to conserve a given area. This ranking can be used in a regression discontinuity design (complementing the impact measured through the randomised experiment). Detailed baseline information will be collected on potential beneficiaries as well as on randomly chosen neighbours. Following randomisation into treatment and comparison villages, the evaluation intends to carry out detailed annual surveys over the course of the 3-year project cycle on treatment and comparison beneficiaries as well as their neighbours.
The study is ongoing and results are yet to be obtained.
About this impact evaluation
There is increasing interest around the world in payment schemes that reward individuals, communities, and projects for conserving ecosystem services. Payments for Ecosystem Services (PES) are instantly appealing as they offer economic incentives for environment and development gains. To date, tens of millions of dollars have been invested in PES projects located in diverse areas like South Africa, Costa Rica and New York City. Discussions are actively underway to implement an international payment scheme that could transfer tens of billions of dollars in payments from developed countries to developing countries for reducing deforestation –which is responsible for 20 percent of annual global carbon emissions. Despite this widespread interest and investment in PES, surprisingly few programs have been carefully evaluated.
Uganda’s National Environment Management Authority and the International Institute for Environment and Development, together with local partners like the Business Development Facility and the East Africa Katoomba Group plan to implement a PES program that provides financial incentives to local communities for conserving biodiversity in important forests located on privately owned land in western Uganda. This forest is ecologically important to Uganda because it provides a corridor for an endangered chimpanzee population. It has also acquired global importance for its role in storing and sequestering carbon and regulating the climate.
The project, which could well be the first rigorous impact evaluation of PES, is a prospective randomised evaluation. The program, which will also be supported by a GEF grant , will randomly select and invite approximately 400 local landowners to conserve forest areas on their land and undertake reforestation/afforestation in return for financial compensation for a period of at least three years. The evaluation will measure whether the PES scheme is a cost - effective tool to enhance biodiversity and human welfare. In particular, it will measure the causal effect of the PES scheme on (1) the nature and composition of biodiversity and (2) the socio-economic welfare of beneficiaries. Additionally, the evaluation will measure, where possible, program spillovers on neighbours of beneficiaries.
Website : www.nemaug.org
Read blog on GEF Climate-Eval forum entitled Evaluating a Payments for Ecosystem Services program in Uganda
Paper published in the American Economic Review entitled Liquidity Constraints and Deforestation: The Limitations of Payments for Ecosystem Services
Blog on GEF Climate-Eval blog entitled Cutting Down Trees for Emergency Cash: Why Access to Credit Can Make PES Programs More Effective.