1. Presentation to Frontiers in Sustainable Development Speaker Series, Kennedy School of Government, Harvard University, Tuesday May 6, 2008 Incentives for sustaining ecosystem services in multi-functional landscapes: a pentagon of research questions for the World Agroforestry Centre Brent Swallow Principal Economist and Global Coordinator, ASB Partnership for the Tropical Forest Margins

2. Overview of presentation 1.Global challenges and opportunities for establishing and maintaining incentives for multi-functional landscapes 2.Defining research questions 3.Projects and some collaboration possibilities

3. Challenges: 1.(Rapidly) increasing market demand for food, fuel and fiber (provisioning ES) 2.Regulating and support services in general decline and increased latent demand 3.Inappropriate and poorly enforced regulations and rights 4.Desire for simple policy solutions leads to simplistic understanding of cause- effect

4. Challenges: Opportunities: 1.Decentralization of authority for NRM (within govt, to corporations, consumers, NGOs) 2.Greater penetration of markets and private sector into utility sectors 3.PES part of a global trend toward flexible environmental policies 4. Interest in REDD for mitigating climate change, while maintaining resilience and options (even in the US!!) 1.(Rapidly) increasing market demand for food, fuel and fiber (provisioning ES) 2.Regulating and support services in general decline and increased latent demand 3.Inappropriate and poorly enforced regulations and rights 4.Desire for simple policy solutions leads to simplistic understanding of cause- effect

5. Incentives as compensation and reward for sustaining ecosystem services valued by off-site beneficiaries

6. Tree Density (on farm / off-farm) Population, Market opportunities On-farm afforestation / agroforestry Conservation and Reduced Emissions from Deforestation and Forest Degradation Public or collective forest management Overarching Context

7. Questions / Hypotheses Realistic Efficiency Acceptability Sustainability Poverty Pentagon of Defining Research Questions

8. Q1. What are the critical spaces in watersheds and mixed-use landscapes where on-farm land use has greatest off- farm effects (eg riverine areas)? Q2. What are likely time paths of landscape degradation and restoration (lags, hysteresis effects)? Q3. What elements of agroforestry and other land use systems are most important for landscape function (eg anchoring and binding for landslide risk)? Realistic / effective Sasumua, central Kenya Ulugurus, Tanzania Western Usambaras, Tanzania

9. Q1. Are there strong negative incentives for farmers to practice good environmental stewardship or the private sector to invest in ecosystem services (eg rural taxation, monopoly on power supply)? Q2. What are the strongest elements of the business case for investment in ecosystem management (compliance, reputation, market niche, cost)? Q3. What is the possibility of using reverse auction approaches for countering problems of asymmetric information? Efficiency

10. Q1. How does the form of conditional payment affect their acceptance in local communities (eg. property rights, monetary payments, public services) Q2. What are the tradeoffs between fairness and efficiency in geographic and social targeting of positive incentives / payments (eg case of REDD in Indonesia)? Q3. Do mechanisms with positive incentives undermine social norms of responsible behavior? Acceptability / Fairness

11. Q1. Under what conditions will payments for environmental services lead to sustainable improvements in ecosystem stewardship? new norms of acceptable behavior Increased uptake of new technologies equity investment by beneficiaries new forms of livelihood that reduce pressure growth in markets for products consistent with sustainability Sustainability

12. Q1. What combination of actions on negative and positive incentives are most likely to meet one of four levels of propoor: 1.Doesn’t harm the poor; 2.More than offsets harm to the poor; 3.Fairly includes the poor; or 4.Differentially benefits the poor. Q2. Does the exclusion of socially-marginalized people undermine the effectiveness and sustainability of mechanisms? Q3. Are mechanisms that involve voluntary engagement in labour-intensive enterprises most likely to differentially benefit the poor (eg reverse auctions for conservation investment)? Poverty

13. Projects and Collaboration Opportunities Propoor Rewards for Environmental Services in Africa

14. Active since 2002 with support from IFAD, EU, USAID, NSF and other donors Network of field sites and country engagement across Southeast and South Asia Action Research with a variety of strategic and boundary partners A number of tools, methods and boundary objects Collaborative research with Sustainability Science on: K2A and boundary spanning Reverse auctions for allocating conservation contracts New phase starting in late 2008 RUPES: Rewarding the Upland Poor for Environmental Services

15. RUPES Action Research Sites Areas of Interest

16. PRESA: Propoor Rewards for Environmental Services in Africa Builds on RUPES experience 3 levels of activity Site-level engagement with partners Policy and private sector engagement Community of practice Funded by IFAD, EU, UNEP, World Bank & Finland for 2008 to 2011

17. PRESA SITES MALAWI

18. Began in 1994 Network of international and national organizations known for sound comparative studies across the margins of the humid tropical forests (11 core members plus 70 others) Global Coordination Unit at the World Agroforestry Centre (ICRAF) in Nairobi and regional coordination for SE Asia, Africa and the Amazon ASB Partnership for the Tropical Forest Margins

19. ASB Research Questions about Reduced Emissions from Deforestation and forest Degradation (REDD) Transaction costs and roles of different levels How changes in commodity markets will change incentives for land use change at the tropical forest margins Need for REDD mechanisms to be efficient, fair, adaptive and consistent with sustainable development pathways How context defines the right mix of Rs – regulations, rights, rewards

20. More information: www.worldagroforestry.org/sea/networks/rupes www.worldagroforestry.org/cres www.asb.cgiar.org