Environmental Service “Payments”: Experiences, Constraints and Potential in The Philippines

About 70% of the country's total land area consists of watersheds. A watershed is a land area that catches and drains water into particular catchments downstream. The ability of the watersheds to regulate the quantity and quality of water depends on its land cover. Forests have traditionally been associated with watershed protection since trees can regulate the flow and cleanse water that drains to the catchments. 

Knowing the importance of the forests for watershed protection, the challenge is to protect the remaining natural forest, encourage non-destructive/pro-environment land uses in secondary forests, and promote sustainable land uses/practices in deforested areas, including cultivated areas. Natural forests and tree-based land uses are important not only because of the critical role they play in providing adequate quantity and quality of water to consumers/users. Their role is also important in maintaining high biodiversity of flora and fauna and also in contributing to reduction of global warming. These environmental services are very important since they serve as the base of economic activities; they support ecological balance, and provide nature-based amenities that make living an enjoyable experience. These are in addition to the life support function that a forest-based ecosystem provides to all life forms, other than humans. It is also important to point out that fortunately, the provision of watershed protection, biodiversity maintenance, and carbon sequestration are joint products, with minimal tradeoff to be expected at some point in time (e.g. cutting down of trees to increase quantity of water may entail loss of biodiversity). These three-fold benefits are important considerations that must be weighed vis-à-vis the cost of maintaining the desired land uses. 

The results of this benefit-cost balancing process seem to yield obvious implications-but this could only be true from society's perspective! Unfortunately, land use decisions in a big part of the uplands cum watersheds are private decisions, made by farmers whose main concern are benefits that accrue to their households in terms of returns from land-based production and forest-extraction activities. Oftentimes, the preferred land uses are those that yield short-term private benefits but at the expense of environmental services that are important to society, at the national and global level. It is the recognition of these potentially non-tangential interests of society and upland farmers (albeit, only a short-run perception) that led to the dominance of community-based project initiatives of the government and other development agencies in upland areas. Under this approach, upland communities are engaged as partners in efforts to protect the environment. Cooperation is oftentimes achieved through provision of various forms of assistance directed at improving the socioeconomic conditions of the upland communities. 

This paper reviews the form of incentives or rewards that have been provided to upland communities in a number of sites under different management leadership in the Philippines. It also discusses what the upland farmers have to do in return for these rewards. The goal of such a review is to evaluate what elements are present in these communities that will support an environmental reward system and in the process, assess the potential of the case study sites for inclusion in RUPES.