Incentives for Ecosystem Services (IES) in the Himalayas: A ‘Cookbook’ for Emerging IES Practitioners in the Region

The importance of incentives in the Himalayan context

The Hindu Kush Himalayas (HKH) is extremely culturally and biologically diverse, and is characterized by its poverty, remoteness and limited accessibility. Payments for Ecosystem Services (PES) are primarily a market-based solution that has been tested and applied in most regions of the world. However, pure market-based solutions may not be as effective as solutions that mix market and non-market (shared or communal) payments and services, especially in a region such as the Hindu Kush Himalayas.

This section describes a few Himalayan characteristics that will influence whether non-market or mixed market and non-market incentives may be more effective than market payments alone. Limited land tenure merits special consideration in the Himalayas, which are characterized by rugged terrain, limited and seasonal access, and large expanses over which herding occurs. In many areas, legal land tenure may be very low (in Nepal, the average landholding per household that is suitable

for agriculture is about half a hectare). Smallholder farmers are common in mountain areas, where many services (access to water, health, sanitation, banking, markets etc.) may be limited. As a consequence, these smallholders may hold much of their net value in their livestock or in communal assets, or they may operate in cooperatives. Limited structures and ability to save funds or diversify income mean that smallholders in mountain areas may have particularly low buffers to shocks to weather, resources, climate or prices.

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Incentives for Ecosystem Services (IES) in the Himalayas