Review of developments of environmental services markets in Sri Lanka


M. Kallesoe; D. De Alvis

Type of Document:
Research Report


World Agroforestry Centre (ICRAF)

Date of Publication:

Place of Publication:
Bogor, Indonesia


Summary: Sri Lanka holds great potential for developing PES and environmental service markets. It is however a relative new concept and improving awareness and building institutional capacity remains a top priority and challenge. Therefore, site specific assessments in support of PES should be developed with the purpose of: identifying, assessing and prioritizing ecosystem services; and supporting the development of equitable institutional arrangements that ensure access to benefits by potential buyers.

Environmental issues and considerations have to a high extent become an integrated part of most laws and regulations in Sri Lanka, and a growing number of decision makers and planners are promoting sustainable management approaches and conservation efforts. Enforcement and state management is however still weak and experiences with implementing sustainable financing mechanisms in an effort to improve local livelihoods and secure environmental integrity are limited. The decentralization of resource management authority in Sri Lanka does however have a beneficial impact on the potentials of establishing PES and environmental services markets. Decentralization can namely potentially reduce transaction costs and improve transparency elements important to the sustainability of developing service rewards. Also a number of development and conservation projects and initiatives offer some lessons learnt, even though they are not specifically dealing with markets for ecosystem services.

The entire agenda of rewards for environmental services has to be adopted at the practical, problem-solving level so that it can be pushed beyond the rhetorical plane in which it has been relegated because of competing policies and environment-related programs, the opportune investment climate for privatization of common resources in the light of global imperatives, and civil society demands.

The identified policy gaps (at the implementation level) and institutional constraints, as the study shows, can be addressed by an agenda that promotes (a) policy enhancement and re-appreciation to recognize the requisites of commons management and benefit sharing, not an all-out reformulation process; (b) capacity and capability building in ES negotiation, valuation, and protection; and (c) research and advocacy on ES management and benefit sharing.

Additional Bibliographic Information

RUPES Working Papers

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