Developing pro-poor markets for environmental services in the Philippines

Abstract

The term ‘markets for environmental services’, or MES, may sound new to most people, including those who have been working in the environmental sector. Yet the concept is not entirely alien, particularly to stakeholders directly affected by environmental and natural resource management. The literature defines market development for environmental services as the creation of incentive systems, mainly through the price system, that provide the link between providers of the environmental service and beneficiaries of the service.1 In this sense, markets for environmental services are distinguished from traditional markets, the latter referring more to hierarchical and cooperative systems of organising production and consumption. Environmental services, alternatively, refer to services provided by the natural environment that ultimately benefit people. Examples of such services include landscape and seascape beauty, watershed protection, carbon sequestration, and biodiversity conservation (Landell-Mills and Porras 2002). These services were traditionally enjoyed free of charge. However, current conditions of scarcity have led to the development of markets for environmental services in various forms and mechanisms. The role of the government is further distinguished in the MES arena. Because of the public nature of most of these services, the government becomes a very active player in market development. In the case of national parks, for instance, government becomes the seller of such services by ensuring their provision through protection and conservation efforts. Payments come in the form of economic instruments instituted in these protected areas, with the assumption that revenues from these instruments will sustain protection activities, and consequently environmental services