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

Part V. Summing Up

In this section, we revisit some of the unique characteristics that have been covered in the prior sections and cases regarding IES in the Himalayas. We have described how incentive structures for IES often differ in the Himalayas from the more specific and formulaic applications in other regions of the world. Lessons learned

However, “the devil is in the details”, and it cannot be argued that these adaptations to IES criteria are uniformly positive adaptations, because they do come with associated (albeit sometimes necessary) costs. Therefore, this section provides a more in-depth look at how or why incentives that are provided in kind to a community may be of maybe more or maybe less benefit than a purely market-based or financial payment. Also, we provide a more in-depth discussion of why providing benefits to a community, as opposed to specific individuals (as is more common in other regions of the world), may have other unconsidered benefits and drawbacks. Collectively managed resources are already prominent across Himalayan landscapes, governance and cultures. This may necessitate incentive structures that are tailored to that collective management rather than to individually managed resources. Collective management raises completely different problems to individual management, as inclusivity of many stakeholder groups, land-ownership, and the potential for uneven distribution of benefits and costs among group members present important considerations. That said, the use and strengthening of existing community decision-making groups, forums and regular governance ‘practices’ can strengthen and prepare communities for facing other, non-IES challenges. The choice between monetary and non-monetary payments is an important one, particularly since it has important implications for individual and community incentives. Individual payments may not

be appropriate or effective in collectively managed resources, and may indeed undermine individual interest in contributing to the common good. Concerns about fairness or disputes about individual payments can also erode delicate or long-standing social relationships, particularly in villages that traditionally have not dealt in a monetary economy. Furthermore, it is unclear whether cash payments equate to recipient satisfaction or may in fact produce the opposite result (dissatisfaction, a greater tendency to compare or induce conflict). For many goods and services with non-monetary, spiritual, ethical or personal value, cash payments may be entirely inappropriate. It is not always clear to interested ecosystem service ‘producers’ why they may not qualify for market- based (PES) schemes, particularly if they have taken good care of their ecosystem to date. One qualifying criteria for market-based PES is that the quantity or quality of the ecosystem service flow must be under threat. Thus, communities that have been strong land and ecosystem service stewards to date are often not candidates for PES. This can appear a somewhat ‘backward’ incentive to some participants. Recent analyses (see Kerr et al., 2014) conclude that the combination of direct and indirect, cash and non- cash reward types encourage institution-building. Stronger community cooperation may also encourage inclusivity and discourage free-riding. However, non- cash payment systems are not a panacea — they have also been found to be perhaps less strict, transparent, quantified or clear-cut. This may result in weaker evidence that the IES has specifically resulted in

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Incentives for Ecosystem Services (IES) in the Himalayas