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As natural habitats have come to be increasingly restricted
and degraded, increasing attention has been paid to conserving
biodiversity in agricultural landscapes. This can be both
an end in itself, driven by the realization that agricultural
landscapes can have high levels of biodiversity, and a means
of complementing conservation in protected areas. Classical
approaches to conservation, attempting to preserve pristine
habitats within protected areas, are necessary but insufficient
in the face of growing pressure on land.
Efforts to enhance biodiversity in agricultural landscapes
need to consider the incentives faced by individual land users,
who decide what practices to use on their land, generally
without considering what biodiversity benefits different land
use practices may have. When biodiversity-friendly agricultural
practices are the most profitable, there is a happy convergence
of private and social interests. But biodiversity-friendly
agricultural practices are not necessarily the most profitable
from the perspective of individual land users. In some cases,
the profitability of biodiversity-friendly practices can be
boosted by inducing consumers to pay a premium for their outputs,
as in the case of shade-grown coffee. But this approach requires
complex certification schemes and is not always feasible.
 A
further approach, which has received increasing attention
in recent years, is to provide direct payments for the provision
of biodiversity services. From the land users’ perspective,
the biodiversity conservation and carbon sequestration benefits
are externalities. As such, they do not take them into consideration
in making their land use decisions, thus reducing the likelihood
that they will adopt practices that generate such benefits.
Recognition of this problem and of the failure of past approaches
to dealing with it has led to efforts to develop systems in
which land users are paid for the environmental services they
generate, thus aligning their incentives with those of society
as a whole. The simple logic of Payments for Environmental
Services is that compensating land users for the environmental
services a given land use provides makes them more likely
to choose that land use rather than another.
Cattle production has long been associated with deforestation
in Latin America, and as such has been an important cause
of the loss of natural habitat and biodiversity in the region.
Encouraged by an ill policy framework, conventional ranching
practices have resulted on the conversion of forest areas
to pastures, with a subsequent degradation of pasture areas
in a time span of few years. Silvopastoral systems, which
combine trees with pasture, offer an alternative to prevalent
cattle production systems in Latin America. They provide a
deeply rooting, perennial vegetation which is persistently
growing and has a dense but uneven canopy. Adoption of improved
silvopastoral practices in degraded pasture areas is thought
to provide valuable local and global environmental benefits,
including biodiversity conservation, However, these practices
are insufficiently attractive to individual land users for
them to adopt them spontaneously, particularly due to their
high initial costs.
 The
regional project Integrated Silvo-Pastoral Approaches
to Ecosystem Management, which is being implemented
with financing from the Global Environment Facility (GEF)
and the Livestock, Environment and Development LEAD Intiative;
is piloting the use of payments for environmental services
as a means of generating biodiversity conservation and carbon
sequestration services in watersheds at three sites in Colombia,
Costa Rica, and Nicaragua. The project is testing the use
of the payment-for-service mechanism to encourage the adoption
of silvopastoral practices and for this has created a mechanism
that pays land users for the global environmental services
they are generating, so that the additional income stream
makes the proposed practices privately profitable. Designing
the mechanism required addressing issues such as:
- measuring the actual amount of environmental services
being provided, so that appropriate payments can be made;
- providing payments in a way that resulted in the desired
change in land use; and
- avoiding the creation of perverse incentives (for example,
for land users to cut down existing trees so as to qualify
for additional payments for tree planting).
The project also includes extensive monitoring of the effectiveness
of this mechanism in stimulating adoption of the proposed
measures and of the resulting impact on environmental services
and on household welfare. These features, together with the
three-country approach, will provide in the coming years a
very rich dataset for testing the use of contract mechanisms
for biodiversity conservation.
The paper Paying for Biodiversity Conservation Services
in Agricultural Landscapes describes the contract
mechanism; the benefits of the silvopastoral practices and
the barriers to adoption; the monitoring of the services and;
examines a number of key questions for assessing the success
and replication of the selected approach developed for the
project.
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