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

This step evaluates the value of the service for producers and consumers, as well as evaluating aspects such as transaction costs that must also be accounted for when setting up an IES system. Step 5. Evaluating

Values can be explored and evaluated using a range of methods and techniques. Evaluation involves considering both tangible and intangible values; whereas tangible benefits can more easily be valued in monetary terms, the non-tangible value of nature is more difficult to assess, making it difficult to account for its loss. An added complication is that in many rural Himalayancommunities thatmaynot oftenusecurrency, or much of it, applying common (Western) valuation techniques may be misplaced. An alternate, labour- based incentive to manage upstream ecosystems may therefore be more useful in quantifying the value of ecosystem services than a cash-based quantification. That said, regardless of the situation, if an IES system is to proceed using an in-kind payment, cash payment or any other incentive, then the ecosystem service consumers’ willingness to pay must be established, relative to the producers’ willingness to provide a given quantity of that good, service or action over a given time. There are different pieces of information that can help producers and consumers evaluate their position, relative to both the service and to their counterpart in negotiation. Sometimes, existing studies or cases can be used, to transfer a value from another example and thus facilitate

discussion. In other cases, professional valuation consultation or study may be necessary. Individuals may state (describe) their values or preferences, or they may reveal them through their behaviour. The many methods and forms of valuation are beyond the scope of this publication. For the purposes of the agreement, the key is that both the consumer and producer agreeona “price” or other formof payment. This must be more or less congruent with an “international standard” for the payment and type of work involved, rather than just a local agreement without further knowledge of which values are being transacted in different areas. In some cases, specific valuation studies can be commissioned, which can bring to light values and willingness to pay. This kind of exercise can help managers set payment tariffs, as well as help identify new groups of beneficiaries and willingness to pay that may remain otherwise unknown and undervalued. Whatever the case, the most efficient solution will produce the desired result at the lowest cost. This ‘lowest cost’ must also account for the transaction cost (to verify, stabilize, document or make transparent) the IES system, across all possible management, participation and payment options.

1

2

3

4

5

6

7

8

9

10

Step 5: Evaluating • Evaluate costs and benefits of management and payment options (direct vs. indirect, individual vs. communal) • Conduct specific research on the value of the ecosystem service; compare it with other values and ranges (locally, nationally, internationally) • It is typical and most often necessary to seek professional assistance to establish market value

24

Incentives for Ecosystem Services (IES) in the Himalayas