Overview and Context

for the Meeting

David McCauleyLead Climate Change Specialist

Philippines Conference onCAPTURING ECONOMIC BENEFITS FROM ECOSYSTEM SERVICES

25 August 2011

Why this gathering?

• PES/REDD+ represents a promising new source of financing for sustainable rural development

• ADB is exploring these opportunities through a regional technical assistance program

• Covering 7 countries: Cambodia, Lao PDR, Papua New Guinea, Philippines, Nepal, Thailand, Viet Nam

• Today a focus on the Philippines (terrestrial), but first a look at the context.

Protecting soil, water & biodiversity

National forest policies recognize the importance of ecological services (though not their economic value)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cambodia Indonesia Lao PDR Philippines PNG Thailand Viet Nam

Production

Unknown

Social services

Multiple use

Biodiversity conservation

Soil and water protection

Forest Context

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Forest extent 2010 (‘000 hectares)

Forest extent 2010 (‘000 hectares)

0

10

20

30

40

50

60

70

80

Land Area with Forests (%)

Land Area with Forests (%)

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

Annual Natural Forest Cover Change 2000-2005 (%)

Annual Natural Forest Cover Change 2000-2005 (%)

Forest Financing Challenges

In practice, however…

• Expenses > Revenues

• Needs > Available funds

Current Fund Sources

• Domestic: national budget allocations & retained forest revenue

• External: ODA grants and loans

Data source: FAO FRA 2010

0.01

0.10

1.00

10.00

100.00

Revenue/hectare Expenditure/hectare

Ecosystem Service Benefits and Monetizing Approaches

• Carbon sequestration (global benefit)

– e.g. REDD+

• Biodiversity conservation (global benefit)

– e.g. TEEB, bio-prospecting agreements

• Watershed protection (regional-local benefit)

– e.g. agreements with energy or irrigation depts

• Landscape aesthetics (regional-local benefit)

– e.g. eco-tourism

Payment for Ecosystem Services Types

Characteristics Private PES Scheme Public PES Scheme

Source of financing

User-financed Government-financed

Scale Small Large

Scope Single-service Multi-service

Paymentscheme

Tailored Uniform

Effectiveness Often successful in

achieving

environmental objectives

Often burdened with

politically motivated side

objectives, blurring

original environmental goals

Efficiency Time-consuming and costly negotiations

Cost-efficient operations

Today’s Objective

• Elicit views and perspectives from Philippine stakeholders

• On PES and REDD+ concept and application

• Especially for improving management of forest ecosystems

• Assess approach as a source of sustainable financing

Who is here?

• Government

• Non-government

• Peoples’ organizations

• Private sector/foundations

• Development partners

Four Sessions

Policy Field

Session 1Climate Change

and REDD+ Strategy

Session 2Palawan, LeyteREDD+ actions

Session 3Watershed

Protection Policies & Program

Session 4Bukidnon

watershed PES +

AM

PM

REDD

Watershed

Outputs & Dissemination

• Short report on discussions, to be shared with DENR and CC Commission as input to REDD+ readiness development

• Inputs to a regional synthesis publication being prepared by ADB

• Summary and presentation web links will be uploaded on ADB website

Forest communities

as marginalized poor

Communities as major

actors in Asia’s forests

Can PES and REDD+

help this transition…?

Transition

Thank you

Salamat po!