Photo for representation: iStock
Photo for representation: iStock

Rewarding the custodians of forests: Payments for ecosystem services can help foster community conservation

These incentives are not handouts, but rather a long-overdue recognition of the invaluable services these communities have been providing for generations

Until a decade ago, Mahalunge was a small, peaceful village on the outskirts of Pune city. Set among low rolling hills, the village was full of pastures, small patches of forests and fields of maize, rice, sugarcane and onions.  

Mahalunge, today, has an apocalyptic feel. Mounds of construction waste and piles of rotting half-burnt trash are piled up on the sides of a half constructed road. The air is full of smoke and dust from the nearby construction sites. Tall buildings with matchbox flats are being constructed at break-neck speed.

Though it seems cataclysmic to the unaccustomed eye, Mahalunge is now a thriving center of economic activity. The influx of workers on the construction sites has led to the creation of numerous dhabas, food stalls, tiny kirana shops and local bars. People who have lived in Mahalunge for decades, though unhappy with the pollution, noise and trash, talk volubly about the significant change economic development has brought about in their standards of living. 

Replacing pristine, natural environments with skyscrapers, office complexes or even mines, highways and factories is profitable in our economic systems. Some argue that it is even critically necessary for ensuring a decent living standard for all Indians. Yet, just in the last 100 years, our planet has lost more trees than in the 9,000 years before that! 

This unprecedented destruction of nature, coupled with increasing fossil fuel emissions has led us into a perilous situation climate change. As carbon levels in the atmosphere reach astronomical levels, we are seeing devastating impacts like floods, forest fires, drought and erratic rainfall affect all parts of the planet.

The summer of 2023 was the hottest summer on meteorological record. The years coming after are only set to get worse. Given that time is running out, can we find a way for our economic systems to work for the planet rather than against it? 

Payments for ecosystem services

This is where the concept of payments for ecosystem services (PES) offers a revolutionary approach. PES is a market-based mechanism that incentivises local communities and indigenous peoples for their role as stewards of the environment. 

By realising the immense value of the ecosystem services the forests provide – from carbon sequestration and water filtration to soil conservation and biodiversity preservation – PES transforms the narrative around nature and helps our economic systems fairly price the immense value that these services provide to us. For example, insects around the world pollinate nearly $600 billion worth of crops. A service that our current economic systems conveniently ignore. 

Recent findings from a 2023 study in Punjab highlight the effectiveness of PES, demonstrating that offering partial upfront payments to farmers significantly reduces stubble burning — by up to 11 percentage points more than traditional PES contracts that give payments post-compliance. 

This innovative approach not only aids in overcoming the initial financial hurdles faced by farmers but also fosters trust in the programme’s reliability, offering a new avenue of optimism for organisations striving to mitigate agricultural fires without the power to impose fines. 

No longer are forests and other ecosystems perceived as mere backdrops for human activity, but rather as vital economic assets deserving of protection and sustainable management. 

Through PES, communities are empowered to become active participants in the fight against climate change, while also securing a sustainable livelihood for themselves and mitigating the long-term social costs of unchecked emissions, and address pressing issues through cost-effective and trust-building approach. 

Community stewardship & PES can transform rural livelihoods 

Communities living and sustaining their livelihoods from forests have practiced sustainable land management for generations and their understanding of ecological balance has ensured the health of the environment. However, modern economic pressures and unsustainable practices have disrupted this delicate balance. 

By providing financial incentives, PES encourages farmers to integrate trees with crops and livestock, diversifying their agricultural practices through agroforestry, enhancing land productivity, increasing biodiversity as well as resilience to climate change. These incentives are not handouts, but rather a long-overdue recognition of the invaluable services these communities have been providing for generations. 

The story of Mr and Mrs Bavarkar, a family in Ahmednagar, Maharashtra, illustrates the transformative potential of PES. Facing financial constraints, dropping crop yields and fluctuating market prices, they had contemplated selling their unused land to get some extra income. However, through a PES programme, they now earn 2-3 times more than they did through cultivation alone, providing a steady supplemental income while also gaining ownership of the trees and fruits grown on his land. 

Harnessing technology for transparency

But PES is not just about financial incentives; it is also about empowering communities with knowledge and tools to monitor their progress. Recent technological advancements, such as satellite imagery, drones and LiDAR data, provide irrefutable evidence of farm and forest health, biodiversity and carbon sequestration rates, allowing for transparent monitoring of conservation efforts. 

This transparency ensures that communities are fairly compensated for their work while also fostering a sense of ownership and pride in their role as custodians of the natural world and warriors against the mounting social cost of emissions.  

Scaling up PES

However, despite the promises that PES offers, it faces its own set of unique challenges. Funding remains a major hurdle and relying solely on philanthropy or government resources is unsustainable. Strategic market engagement is crucial, but this requires ensuring the market rewards ethical and sustainable practices. The presence of “carbon cowboys” – unscrupulous carbon trading entities – further accentuates the need for robust regulations and ethical standards.  

The journey of integrating PES into broader environmental and developmental agendas is ongoing. Scaling up these initiatives requires strengthening policy frameworks, enhancing community engagement and forging partnerships across sectors. 

The time is also ripe for innovative financing mechanisms that can mobilise resources from public, private and philanthropic sources. We should focus on creating resilient and adaptive PES interventions that can withstand the evolving challenges of this world.

Collective conservation action

The way forward is clear: We must embrace a holistic approach that understands the interdependence of economic, social and environmental factors. By harnessing the power of technological advancements and fostering cross-sector collaborations, we can ensure transparent monitoring of conservation efforts, fair and just incentives for communities / community stewardship, ethical market practices and sustainable funding sources. 

Let us reflect on the urgency of the challenge before us and the incredible resilience and wisdom of those who have long stewarded our farms and forests. Their knowledge and stewardship hold the key to preserving these vital ecosystems, mitigating the impacts of climate change and creating a greener, more resilient future.

The Centre for Science and Environment and Down To Earth have raised questions on the generation and trading of carbon credits in the voluntary carbon market and have reported extensively on the malpractices within India. Krutika Ravishankar is the co-founder of Farmers for Forest,  part of ClimateRISE Alliance. Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth.

Down To Earth