1. Peruvian law on rewards mechanisms for ecosystem services Marcela Quintero (CIAT), Roger Loyola (MINAM), Yolanda Puemape (MINAM), Piedad Pareja (CIAT) Place Center Logo here October 2, 2014.

2. Canete River Basin: Official PES pilot case in Peru

3. Poverty in Perú: 60% in the Andean region (22% in the Pacific coast region) (INEI, 2007) Source: ANA, 2009. National policy and strategy for Peruvian water resources.Lima. Perú. Most of the water coming from the Andean highlands (85%) is used in the Pacific coast

4. From a case study to a national law  PES case piloted by Ministry of Environment  Initiative to draft a Law on PES in Peru  2010 – CIAT and MINAM agreement Providing scientific support for designing PES scheme in Canete Basin CIAT incorporated by Ministry of Environment in Peru as technical and scientifical advisor for the formulation of ESS Law CAÑETE

5. Are other PES-type incentives in watersheds facing similar bottlenecks? 16 initiatives TILACANCHA NANAY CUMBAZA GERA QUIROZ JEQUETEPEQUE QUANDA Y BOTIJAD CAÑETE SANTA CHILI CACHI ICA - HUANCAVELICA RIMAC PIURAY SAN ALBERTO Y LA COLINA RUMIYACU, MISHIYACU Y ALMENDRAS ALTO MAYO

6. PES scheme phases PRELIMINARY Initial discussions to promote a PES scheme DIAGNOSIS/ SCOPING ANALYSES ES identification; mapping of actors; biophisical baselines, legal feasibility, economic valuation, etc. DESIGN Definition of ES providers and buyers; PES manager; financial mechanism design; rewards modality; contracts design, etc. NEGOTIATION Contribution amounts, periodicity, PES governance, etc. IMPLEMENTATION RES is operating: ES beneficiaties are contributing to a PES fund Types of bottlenecks for PES implementation Quintero et al. 2014

7. PES initiatives in watersheds of Peru (until 2013)

8. Main bottlenecks in PES implementation Lack of clarity in the role of public actors in PES implementation  Who can collect rewards for ES and how? Municipalities: Can they collect contributions from their inhabitants? Can they distribute those rewards among ES providers under a contractual basis? Water supply companies - can they collect by raising water charges? Can they transfer the payments to a PES fund?  Can the public sector make monetary contributions to PES-type schemes?  How to incentivize private sector to reward for ES?

9. Main bottlenecks in PES implementation PES governance  Watershed committees (created by law but not operational)  New instances (with a legal status?)  Who supervises the proper functioning of PES?  Who can provide guidelines for designing PES and agreements?  How should the agreements (from a legal perspective) be developed depending on the legal status/nature of ES providers?

11. Approved law  Official recognition of RES (is not illegal)  RES is voluntary  Definition of ES (not only provided by forests)  Rewards instead of payments (improving and maintaining ES provision)  Rewards for human actions that contribute to the provision of ES (is not commoditization of nature)  Enable public sector to participate as beneficiary/provider of ES  Enable water supply companies to collect rewards for ES from water users  Assign the role of supervision to the Ministry of Environment  Clarifies that whoever helps in the provision of ES can receive a reward for this (even though ES benefits belong to the State)

12. Future (present) steps How to implement the law?  Specific rules and guidelines (design is mandatory by law) Contracts Minimum standards Registration Mechanisms for municipalities and water companies to collect contributions from water users

13. UNITING AGRICULTURE AND NATURE FOR POVERTY REDUCTION To be launched during the COP20!