Streamlining local development plans, networking, and cascading mandates about the foundations of payment for ecosystem services (PES) scheme will boost the capacity of the government and partner-stakeholders to address socioecological issues.

This was according to a recent study published by state think tank Philippine Institute for Development Studies (PIDS). Authored by PIDS Senior Research Fellow Sonny Domingo, Research Specialist Arvie Joy Manejar, and Research Analyst John Joseph Ocbina, the study looked at how PES as an approach contributes to promoting sustainable development and ecological integrity efforts in the Philippines.

PES schemes incentivize individuals or communities to preserve and enhance the delivery of important environmental services. They aim for sustainable resource usage, including carbon sequestration, watershed conservation, and preserving biodiverse habitats.

The authors explained that PES is a way to “assign a price tag to the environment”, which the market fails to do. Although the environment’s economic value is vast, “the total contribution of natural capital like forests, wetlands, and agricultural lands” is not reflected in standard measures of the economy.

According to a United Nations report, ecosystems are deteriorating globally. The size and quality of the world's ecosystems have declined by 47 percent; this is expected to persist by at least four percent every decade. Meanwhile, severe alteration of the terrestrial environment caused by human actions reached 75 percent since 2019.

The Philippines topped anew the 2022 World Risk Report, which assessed the disaster risk of 193 countries.

The authors noted that institutionalizing PES in the country has been met by barriers. These include unclear policy links, arbitrary methodology, weak sustainability measures, and limited capacity and resources. While there are enabling provisions for PES in national policies, they do not guarantee the provision of resources and support for the projects.

“Local government agencies and policymakers remain unaware of the concept of PES. The success of PES depends on the assumption that there is cooperation between these stakeholders. Communicating its process and benefits should be detailed and well-organized,” they explained.

Domingo and his coauthors added that PES schemes promote “active engagement and collaboration with indigenous peoples and local communities”. To realize this, “multiple consultations for awareness building and scoping out entry points and challenges to the agreement” are vital.

The study recommended capitalizing on the evolving PES definition and the government's growing interest in addressing the barriers because multiple policy proposals are already underway. It also called for augmenting accounting and auditing rules to reflect PES and natural capital accounts, pursuing a legal platform at national government agencies—particularly the Department of the Interior and Local Government and the Department of Education—and subnational levels, and instituting transparency platform and data management.

The authors also emphasized the need for a holistic approach for a successful national PES, not dispersed initiatives and disjointed efforts. “The linkage and integration of monetary and resource data can provide more accurate and up-to-date insights on environmental protection expenditure; industry value added, employment, and population; national plans; and international commitments,” they added.

This press release is based on the PIDS discussion paper titled “Looking at Payments for Ecosystems Services in the Philippines.” ###

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