Description

Summary: The paper explores one example of a system for valuation of forest goods and services, assessing its advantages/disadvantages, lessons learnt and its application to large scale integrated projects and the implications for FLR.

Payments for Forest Ecological Services (PES) is an alternative approach to encouraging the conservation and restoration of forest ecosystem by paying private lands owners directly for conservation performance (Ferraro and Simpson, 2000). In this approach, those that benefit from the provision of environmental services, derived from land uses and production systems that improve the environment and life quality, make payments to those land owners that supply the services (i.e., to those that adopt the desired land uses and production systems). In the case of land uses such as forest management, commercial reforestation, as well as forest conservation, the payments for environmental services are additional to the incomes from forest products sales, therefore, they help to improve the irregular cash flow frequently seen in forest production systems.

The Costa Rican Payments for Environmental Services Program (PESP), which is executed through the Fondo Nacional de Financiamiento Forestal (FONAFIFO) and the Sistema Nacional de Areas de Conservacion (SINAC), aims to protect primary forest, allow secondary forest to flourish, and promote forest plantations to meet industrial demands for lumber and other wood products. These Goals are met through site-specific contracts of payments for ecological services with individual farmers.

The PES program provides market-based incentives to conserve natural forest ecosystems. These economic incentives help maintain habitats that are critical to a rich, globally important biodiversity, and have the potential for helping to maintain biological corridors linking national parks and biological reserves.