The new economics of the environment

Besides funds for past conservation efforts, end-users may pay for ecological resources
12 October, 2009 - In the not too distant future, Bhutan could get rewards in the form of funds from international environment organisations for protecting its forests and water.

Inside Bhutan, that idea is being stoked around and officials are already warming up to the practicality of collecting funds from end users of environment resources like hydropower projects. The ultimate plan is to plough back the funds into the source of these resources, like watershed and bio-diversity, so that they become sustainable in the long run.

As regards international funds: in the past, it was only through clean development mechanism, which was essentially employment of clean technology to restrict emission, under which a country could earn carbon points and thus the funding for its conservation efforts.

Carbon points were not given for preservation of environment or forests under the Kyoto protocol, said a food and agricultural organisation (FAO) official, who is in Bhutan to study ‘payment for environment services’ (PES) with the ministry of agriculture’s watershed division.

But that could very well change in the coming months.

“Bhutan’s strongest potential in getting carbon points is its existing forests because, in the upcoming climate change talks in Copenhagen, there will definitely be an international agreement to reward countries for protecting existing forests,” said FAO consultant and environmental scientist, Bernardete Vitorino Das Neves. This, she added, will be possible under REDD or reduced emissions from deforestation and degradation framework supported by UNDP and UNEP.

The Copenhagen climate change meeting from December 6-18 will decide on the next set of targets for countries to reduce greenhouse gas emissions.

The Kyoto protocol, which set the first emission reduction targets, will end shortly.

“The storage of carbon by the forests is a service in itself since, by not cutting down the trees, the country or the local farmers are losing out on timber and food crops,” said Bernardete Vitorino Das Neves.

Under the PES system, Bhutan could get funds from carbon trading for watershed management, conserving Bhutan’s forest and biodiversity and improving food security. PES views environment as provider of services like clean water, air, food, fuel, recreation, natural disaster protection, and hydropower. It is also of the opinion that there has to be some kind of voluntary payment made for environmental protection so that these services remain sustainable.

For instance, under PES, Tala and Chukha hydro projects can pay to protect their watershed areas so that there is less sedimentation, or people of Thimphu can pay to conserve their drinking water sources so that taps don’t run dry. However, the plan is that the entire PES plan be voluntary.

“Environmental services like fresh water are not free and also depend on watershed conservation of water sources by farmers living upstream and so, if the end users like hydroprojects and people can pay, then the farmers will get benefits and have an incentive to protect the source,” said chief forest officer, Karma Tshering. He added that donors funded most of Bhutan’s environmental programs, which was not sustainable in the long run.

Eco-tourism is another area whereby tourists can pay more for new trekking routes and improved services and infrastructure, and the money would go to preserving the environment under PES.

“An important component of eco tourism will be where local communities will be able to benefit for the eco services in ensuring better protection of the environment and also equitable distribution of the benefits of eco-tourism,” said FAO’s Bernardete Vitorino Das Neves.

Another area is biodiversity conservation, she said: “An example here is human-wildlife conflict whereby payments could be sued to compensate farmers or help them to come up with defenses so that wildlife remain protected and farmers can have a good income.”

By Tenzing Lamsang
Source: http://www.kuenselonline.com/modules.php?name=News&file=article&sid=13677 (Kuensel)