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PREM Project Report - Designing Payments for Watershed Protection Services of Philippine Upland Dwellers

Author(s) Eugenia Bennagen, Anabeth Indab, Arlene Amponin, Rex Cruz, Renato Folledo, Pieter van Beukering, Luke Brander, Sebastiaan Hess, Arnout van Soesbergen, Kim van der Leeuw, Jaap de Jong
Date 2006-12-12
Theme(s) Water, Forest, Climate, Agriculture
Method(s) Valuation and CBA, Social Analysis, Regression Analysis, Policy Instruments, Economic Modelling
Serie(s) Project Reports


The forest is home to a large, marginalized sector of Philippine society composed of both migrant and indigenous dwellers.  They constitute about 20 million or 25% of total population and are generally considered the poorest of the poor.  The attraction of the forests to the poor has partly to do with the lack of livelihood opportunities in the lowlands and partly with the numerous goods and services the forests provide for free.  If properly managed by the upland dwellers, the forests can provide society with both use values such as timber and non-timber products, beautiful landscapes, recreation and hydrological services and non-use values like climate regulation, carbon sequestration and biodiversity. The offsite beneficiaries of these services are the downstream industries and residents who are normally better off in economic standing than the upland dwellers but who do not pay for the external benefits they derive.  

In recent decades, there has been a growing interest among resource decision-makers in developing countries in market-based instruments (MBI) as a strategy to address the twin goals of resource management and poverty alleviation.  This development is attributed to the poor performance of command and control policies in resource management in the absence of complementation from market-based instruments (MBI).  A recent and innovative MBI that is gaining importance globally is payment or compensation for environmental services (PES).  PES seeks to promote forest conservation activities by recognizing and compensating forest owners or dwellers for the environmental services they provide and making the beneficiaries of these services pay for them.  The basic idea in PES is to create a market for environmental services by linking together the providers and users of these services and creating incentives to both groups to protect the integrity of the forests.


Type Name Format  
Full Document PWS Philippines final report.pdf PDF Document Download

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