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Ecosystem Marketplace, Community Forum Newsletter

Vol. 3, No. 1: February 22, 2008    

From the Editors

The Ecosystem Marketplace's Community Forum
Connecting people to ecosystem markets

Welcome to the Community Forum, a newsletter dedicated to providing information on community-based payment for ecosystem services from around the world!

Since the United Nations conference on climate change this last December, one of the big topics in the world of payment for ecosystem services has been "avoided deforestation," compensating countries or communities for reducing the destruction of their forests in order to mitigate climate change. In this issue of the Community Forum, we take on the issue of compensation for avoided deforestation. What are the obstacles to implementation? Will it actually work? And, most importantly, how can we ensure that the benefits produced by these programs reach the communities who live in and are supported by forests?

In our Around the World section we examine the impact of the Coalition of Rainforest Nations on driving the issue of compensation for avoided deforestation and then take you to Paraguay for some lessons from a project that has been in place for almost twenty years. We move on to Nepal, to a program that has attempted to secure financial benefits for communities managing the watershed upstream from a hydropower plant, and to Kenya, to a successful ecotourism lodge managed by local communities. In this issue we also provide a profile of Ketut Deddy, director of an Indonesian NGO focused on forest conservation, and his view of compensation for avoided deforestation. In our Opinion section we summarize a recent report on payment for ecosystem services as a solution to poverty, and in our Tools and Resources section we provide a number of manuals and guides that explain the basics of how to start PES projects in the communities you work with.

Be sure to see our Opportunities section at the end of the newsletter for up to date information on funding sources, educational opportunities and conferences of relevance to all of us involved in community-based payment for ecosystem services.

We hope you enjoy this edition of the Community Forum! If you do, please forward it on to friends and colleagues. We want to be able to share this forum with the many people around the globe involved in community-based payment for ecosystem services.

– The Community Forum Team

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News Report

Global: The Coalition for Rainforest Nations Promises to Help Slow Climate Change, But at a Price
by Elizabeth Shapiro

The recent international climate change negotiations in Bali, Indonesia saw a shift of power towards developing countries, albeit a small one. The clearest example of this came when the representative from Papua New Guinea shouted at the representatives from the United States, who were balking at ratifying a negotiated agreement, saying, "If for some reason you're not willing to lead, leave it to the rest of us. Please get out of the way." Papua New Guinea is one of the thirty-three member countries of the Coalition of Rainforest Nations. The group has led the way in pushing for a climate change treaty that would create a policy framework through which industrialized nations would compensate developing countries for "avoided deforestation," climate change mitigation brought about by protecting green house gas-sequestering forest ecosystems. The Coalition claims that in excluding the possibility of compensation for avoided deforestation, the current climate change agreements place most of the economic burden, and none of the benefits, of climate change mitigation on developing countries. This issue is relevant to all of us involved in community-based PES programs because, if agreed to, compensation for avoided deforestation could radically increase the funding available for forest protection projects in developing countries. Though the Bali conference brought about no final resolution to the question of avoided deforestation, it is likely to remain a hot topic of debate as countries follow the "Bali Roadmap" to renegotiate the Kyoto Protocol before it expires in 2012. Meanwhile, the voluntary market for avoided deforestation is already moving ahead. On Feb. 7, 2008, the insurance company Merrill Lynch announced plans to purchase 100 million tons of offset carbon from a forest conservation project in the Aceh province of Indonesia.

  – New York Times article on Papua New Guinea's challenge to the US at Bali
  – Coalition of Rainforest Nations website
  – Ecosystem Marketplace article on the deal between Merrill Lynch & Indonesia

Paraguay: Lessons in Avoiding Deforestation from the Mbaracayú
by Steve Zwick

Nearly two decades ago, a small Paraguayan NGO teamed up with a global environmental NGO and a mid-sized American energy provider to save a chunk of rainforest from the sawmills by offsetting greenhouse gas emissions. Six years before the Kyoto Protocol was drawn up, North American energy provider Applied Energy Services (AES) paid $2 million to offset roughly 47 million tons of CO2 by helping to fund the Mbaracayú Forest Nature Reserve (MFNS) in Paraguay. It was 1991, and the debate over forestry credits was foggy to say the least. Indeed, few outside of a tiny circle of forward-thinking academics and activists had truly pondered how to quantify the amount of carbon captured in trees, let alone how to measure the impact of sustainable forestry on indigenous people. MFNS organizers, however, managed to create a 64,000 hectare private reserve, the benefits of which flow out to a 300,000-hectare buffer zone of sustainable agriculture. The indigenous Aché people have taken an active role in managing the reserve, and smaller private reserves are sprouting like mushrooms in the buffer zone to create migration corridors in support of a UNESCO-recognized biosphere reserve. The Ecosystem Marketplace revisits one of the world's first carbon offset projects to find what lessons can be applied to current compensation for avoided deforestation programs.

  – Read the Ecosystem Marketplace article

Nepal: The Kulekhani Project with RUPES
by Rachel Miller

The Kulekhani reservoir is one of 15 hydropower reservoirs in Nepal and provides 17% of Nepal's hydropower capacity. The reservoir catchment area, or Kulekhani watershed, is also the home of 45,000 residents in eight communities, most who depend on forests for their livelihoods. These communities were unaware that their forest management and conservation efforts in the watershed area were providing critical environmental service benefits to the hydroelectric plant operating in the watershed. In 2003, RUPES (Rewarding Upland Poor for the Environmental Services they Provide) and Winrock International set out to establish and implement a PES project in this watershed. The RUPES project wanted to link providers and beneficiaries of ecosystem services in the area, and initially set out to identify and value environmental services, and build educational awareness and capacity around the importance of environmental services for both suppliers and buyers. The hydropower plant in the Kulekhani watershed is required by law to pay royalties to the central government. A portion of this payment is given to the local government, though none of these royalties came directly to communities for the role they played in the stewarding resources critical to the effective functioning of the plant. Of the three potential buyers of the services, the hydropower plant, central government, and local government, the RUPES program identified the local government as the appropriate mechanism of reward transfer. They developed a new Environmental Management Special Fund, where 20% of the royalties received by the local government were deposited and used to support conservation and development programs proposed and developed by the communities. The fund is administered by a group of representatives form the Kulekhani communities. In 2006-07, the total deposited in the fund equaled $54,800, approximately $1.50 per person per year. Though this is sufficient to fund some community development projects, it is not enough to significantly impact poverty in the area. The project managers have concluded that payments for watershed protection services alone are not enough to fund conservation or development. The project is looking to other directions for methods of bundling/layering of environmental services to increase incomes from the project. The RUPES program continues to work in the area and following the establishment of an enabling environment and linkages to communities, the Kulekhani project is currently working on the design of Phase II.

  – Read the RUPES Case Study (pdf)

Kenya: Il N'gwesi Ecotourism Lodge benefits households and conservation
by Rachel Miller

In 1995, pastoralists in the Laikipa Plains in northern Kenya came together to establish a Group Ranch, made up of 500 households and covering a span of 165 km2. Prior to the establishment of the Group Ranch, poaching, illegal logging, and over-grazing threatened and endangered wildlife in the area. With support from the Lewa Wildlife Conservancy and funding from the Kenya Wildlife Service, the group established the first community-owned and managed lodge in Kenya. Revenue from the ecotourism lodge is paid into a community owned trust where local Maasai serve as trustees and oversee project implementation. The high-end ecotourism lodge provides jobs and income, which in turn produces a variety of conservation and social benefits. Using revenue from the ranch, the group has hired guards to protect against poaching and excessive logging, and invested in community infrastructure and services including a primary school, nurseries, and improved water maintenance and health schemes. They also implemented a controlled grazing plan, which helped regenerate flora and fauna in the area. Part of the Ranch, where the ecolodge is located, has been set aside to serve as a conservation area for wildlife populations. The rest of the land is managed more intensely and directly supports the nearly 500 households in the area. One of the factors that have made the Il N'gwesi project successful is that the ecosystem services the ranch provides, wildlife, has a ready and affluent market. However, another crucial component of project success is that the Samburu pastoralists are a homogenous population and that land rights were defined in the 1960s.

  – Visit the Il N'gwesi Website
  – Lewa Wildlife Conservancy



Payments for Ecosystem Services: Issues and Pro-Poor Opportunities for Development Assistance
by Ravnborg, Damsgaard, and Raben

Identifying opportunities to help shape PES into a mechanism with pro-poor benefits is one of the challenges faced by many in the PES community. This study, published by the Danish Institute for International Studies, defines PES, reviews experiences to date on pro-poor PES, and identifies challenges related to PES, both conceptually and internally. The final section of the report, and the whole of the briefing paper, identifies key areas of supporting PES programs that the funding community could become engaged in without sacrificing the voluntary nature of these schemes. The authors suggest that PES can in fact be a mechanism for creating positive change for the poor, and outline four key areas for the development community to focus on to ensure pro-poor outcomes from PES. They cite: supporting the adjustment of legal and institutional frameworks to enable legal recognition of PES schemes; support in design of PES schemes, including building operational monitoring into the design; support to increase certification services available and consequently reducing transaction costs; and, support of social and impact monitoring as key opportunities where the development community can play a role, yet maintain the voluntary nature of PES schemes. The study also includes a linked annex with vast resources and references on PES.

  – Read the full report (pdf)
  – Read the brief (pdf)



Director of Indonesian NGO Says Compensation for Avoided Deforestation Faces Challenges, but Also Great Promise
by Rhett A. Butler

While environmentalists, scientists, development exports, and policymakers across the political spectrum are enthusiastic about the idea of offsetting carbon emissions by preventing deforestation, known as "avoided deforestation" or Reduced Emissions from Deforestation and Degradation (REDD), the idea still faces many challenges, especially in implementation. Issues range from "permanence", whether a county can ensure that forest carbon savings are permanent, to "leakage", carbon conservation in one area driving deforestation in another, to "baseline measurement", measuring historic deforestation rates to establish a baseline for calculating reduction. Further questions over land rights, such as whether REDD will trigger a land rush by industrial agriculture giants and forestry firms, as well as how local communities will benefit are also valid. For instance, the cost of registering and establishing a REDD project may top $50,000, a nearly insurmountable sum for communities and small-scale forest holders in some of the world's poorest countries. Still, with deforestation and land use change accounting for as much as 20 percent of global greenhouse gas emissions--more than the entire transportation sector--many agree that that REDD will be an important part of a global climate change mitigation strategy. With its carbon-rich forests and peat lands, Indonesia is widely seen as having the best potential for REDD initiatives. Working to address these issues is SEKALA (, an Indonesia-based NGO that was formed in 2005. Through community training, remote sensing and spatial analysis work, and land-use planning, SEKALA aims to develop "realistic, tangible and innovative solutions" for environmental problems. Ketut Deddy, director of SEKALA, said he is optimistic that REDD can deliver benefits to rural populations while protecting forests and their resident biodiversity. As he said, "REDD has the possibility to mobilize unprecedented funding and technical assistance for initiatives seeking to reduce deforestation and forest degradation in Indonesia. If successful, these initiatives will not only benefit the global community who will be affected by climate change, but also benefit conservation initiatives seeking to conserve Indonesia's rich biodiversity, particularly in the increasingly threatened lowland forests of Sumatra and Kalimantan." Read the full interview for more on how Ketut Deddy and SEKALA are working to implement REDD programs in Indonesia.

  – Read the interview
  – Visit SEKALA's website


tools and resources

Two Brochures from the Katoomba Group Provide Introduction to PES

"An Introduction to Payment for Ecosystem Services" and, "Getting Started with Payment for Ecosystem Services"
The "Introduction to PES" brochure is a helpful streamlined brochure introducing the concept of PES, providing information on available PES resources, and linking the reader to people and organizations working with ecosystem services.

The "Getting Started" brochure introduces the full-length Getting Started publication (Getting Started: An Introductory Primer to Assessing and Developing PES Deals) by taking the reader through the basic steps of the Getting Started primer, and outlining the information the primer covers in a condensed, easily manageable brochure.

Both brochures are a great introduction for anyone interested in getting started with PES!

Brochures are available in English, Spanish and Portuguese

  – Intro to PES (pdf): English, Spanish, or Portuguese
  – Getting Started (pdf): English, Spanish, or Portuguese

Conservation Economy Backgrounder
by the Katoomba Group & the Ecosystem Marketplace

Need a refresher course on environmental services or confused by all the terminology? Check out the Conservation Economy Backgrounder, which provides an introduction to ecosystem services and PES, and includes an extensive glossary of the terminology used in this field.

  – Download the Backgrounder (pdf): English or Spanish

Negotiating for Nature's Services: A Primer for Sellers of Ecosystem Services on Identifying & Approaching Prospective Private Sector Buyers
by Jackie Prince Roberts & Sissel Waage, 2007

This primer was written to help rural communities tap into these emerging markets for ecosystem services in order to fund local conservation and sustainable development. It is intended to be a reference tool for identifying, negotiating, and closing ecosystem service deals with private sector buyers. In issuing this primer, Forest Trends hopes to increase the number of conversations between potential sellers and prospective private sector buyers of ecosystem services.

  – Download the primer (pdf): English or Spanish

Markets for Ecosystem Services – New Challenges and Opportunities for Business and the Environment
Published by IUCN and the World Business Council on Sustainable Development

This helpful briefing evaluates private sector engagement in ecosystem service markets and conservation practices. In addition to establishing the 'business case' for engaging in ecosystem service markets, the paper pays attention to the efforts necessary to ensure that markets also serve the poor and those living in rural communities. The publication also provides an in-depth look at four specific types of ecosystem service market/payment mechanisms and assesses limits and opportunities within potential markets. The report closes with key elements to keep in mind as you enter in ecosystem service markets.

  – Download the report




Seventh Session of the United Nations Permanent Forum on Indigenous Issues
The Seventh Session will take place at United Nations Headquarters, in New York, from 21 April to 2 May 2008. The special theme will be "Climate change, bio-cultural diversity and livelihoods: the stewardship role of indigenous peoples and new challenges." Pre-registration is open to indigenous peoples' organizations, academic institutions and NGOs with ECOSOC consultative status. Please visit the Seventh Session webpage, where you will find all online registration forms:


  – Visit the website

El Séptimo Foro Permanente para las Cuestiones Indígenas de las Naciones Unidas
El Séptimo período de sesiones se llevar a cabo del 21 de abril al 2 de mayo de 2008 en la sede de las Naciones Unidas, en Nueva York y el tema especial sera "El cambio climático, la diversidad biocultural y los medios de vida: la custodia por los pueblos indígenas y nuevos retos". La pre-inscripción está abierta para las organizaciones de pueblos indígenas, las instituciones académicas y las ONGs con estatus consultivo ante el ECOSOC.


  – Link a la página web en donde podrá acceder a los formularios de pre-inscripción en línea


Forestry Funding News
This electronic newsletter is compiled by the FAO Collaborative Partnership on Forests (CPF) team. It is a compilation of news related to forestry funding for fund seekers worldwide. All back issues of the newsletter may be found on CPF Sourcebook's Web site, though some links may no longer be available on the internet after a period of time.

  – Forestry Funding News

Wildlife without Borders Grants from the United States Fish and Wildlife Service
Deadline: varies with type of grant
These grants support training and capacity building in relation to international biodiversity conservation. As part of their Regional Program, grants are given to projects in Africa, China, India, Latin America, the Caribbean, Mexico and Russia. Their Species Program funds projects related to the conservation of particular endangered species, including marine turtles, great apes, rhinoceroses, African elephants, Asian elephants, and tigers.

  – Wildlife without Borders website

Programa de Vida Silvestre sin Fronteras del Fish and Wildlife Service de los Estados Unidos
Fecha limite: depende del clase de beca
Estas becas apoyan el desarrollo de proyectos internacionales de capacitación sobre conservación de biodiversidad. Como parte de sus programas regionales, becas están asignadas a proyectos de África, China, India, América Latina y el Caribe, México y Rusia. El Programa de Especias apoyan proyectos relacionados a la conservación de especias en peligro de extincción particulares, incluyeno tortugas marinas, simios grandes, rinocerantes, elefantes Africanos, elefantes Asiaticos, y tigres.

  – Link en Español para el programa de México
  – Link en Español para el programa de América Latina y el Caribe

British Petroleum's Conservation Leadership Programme
Deadline: November 2008
The Conservation Leadership Programme is offering Future Conservationist Awards of up to $12,500 to high potential teams who aim to develop their skills through practical conservation projects. These awards are highly competitive and winners are selected from amongst the highest quality applications. There will be $250,000 worth of funding available for the Future Conservationist Award winning projects in 2008. Successful applicants will: 1) Develop the knowledge, skills and abilities of team members; 2) Implement a focused, high-priority conservation project combining research and action; 3) Contribute to the long-term success of local conservation efforts; and 4) Contribute to the education and awareness of local stakeholders. Projects must take place in one of the following countries: Algeria, Angola, Argentina, Azerbaijan, Bolivia, Brazil, China, Colombia, Egypt, Georgia, India, Indonesia, Libya, Malaysia, Mexico, Pakistan, Russia, Trinidad & Tobago, Turkey or Venezuela. They must be led by a national of the country where the project takes place; co-leadership with non-national team members is acceptable.

  – Conservation Leadership Programme

The A.J. Muste Memorial Institute's NOVA Travel Fund
Deadline: Dec. 2008
Launched in 2007, the NOVA Travel Fund (Fondo NOVA-Viajes) makes grants of up to $1,500 to help base-level activists from Latin America and the Caribbean attend regional conferences and meetings. Grant recommendations are made by a committee of advisors representing different regions of Latin America.

  – A.J. Muste Memorial Institute

Fondo NOVA-Viajes del Instituto Conmemorativo A.J. Muste
Fecha límite: diciembre, 2000
Lanzado en 2007, el Fondo NOVA-Viajes ofrece aportes de hasta US$1.500 para ayudar a que activistas de América Latina y el Caribe puedan asistir a conferencias y reuniones regionales. Los aportes son recomendados por un comité de asesores representando a diferentes regiones de América Latina.

  – Instituto Conmemorativo A.J. Muste

Verde Ventures from Conservation International Funds Green Business Initiatives
Deadline: No specific deadline.
Verde Ventures is a $7-million investment fund managed by Conservation International that strengthens small and medium-sized enterprises with strategic importance to biodiversity conservation. The fund provides debt and equity financing of $30,000-$500,000 to select businesses in CI's priority areas. Through a new collaboration with the United Nations Development Programme, the fund also provides limited grant funding for enterprise development and monitoring for eligible businesses. Application instructions are available in English, Spanish, Portuguese and French.

  – Verde Ventures

Fondo Verde Ventures de Conservation International
Fecha limte: No hay fecha limite.
"Verde Ventures" es un fondo de inversión de US $7 millones administrado por Conservation International (CI) para fortalecer pequeñas y medianas empresas que tienen una importancia estratégica para la conservación de la biodiversidad. El fondo brinda financiamiento por medio de crédito e inversiones accionarías entre $30.000 a $500.000 para empresas en áreas de prioridad para CI. Aplicaciones están disponibles en Inglés, Español, Portugués y Francés.

  – Verde Ventures (pdf)

The United Nations Development Program's Equator Ventures
Deadline: This program is still in pilot phase but may be accepting applications soon.
Equator Ventures' clients are drawn from conservation enterprises that deliver demonstrable conservation and socio-economic benefits in priority areas. These enterprises may be found in traditional sectors such as agroforestry, ecotourism, ecosystem services or non-timber forest products. However, Equator Ventures' client pool will also welcome enterprises from other areas of endeavor, provided they can demonstrate positive impacts on biodiversity and communities. Equator Venture's mission is to provide a "blended" offer of debt finance and enterprise development support to viable small and medium sized biodiversity businesses. Equator Ventures will invest in ventures at all stages of development. Loans between US$30,000 and US$500,000 will be provided for the sustainable growth needs of projects. Complementary grants will support a comprehensive business development and capacity building program, tailor-made to meet the needs of successful entrepreneurs from the developing world.

  – Equator Ventures

Rufford Small Grants for Nature Conservation
Deadline: No specific deadline
Rufford Small Grants for Nature Conservation (RSGs) provides grants of up to £5,000 aimed at small conservation programs and pilot projects. Individuals or small groups in the developing world are eligible. The impact of the project must be pragmatic, measurable and long lasting. The grant must make up the majority of the total budget and funds must be used predominantly in the field. The project should generally be approximately 12-18 months duration. The Rufford Foundation also offers Innovations Awards that are given to new, substantial projects that could have ground-breaking effects in nature conservation in the developing world. Projects receive a one-off grant of up to £50,000.

  – Rufford Small Grants for Nature Conservation

Allachy Awards for Conservation of Medicinal Plants
Deadline: No specific deadline
The purpose of the awards has been to build capacity for the conservation and sustainable use of medicinal plants. Selected projects have taken community-based approaches to medicinal plant conservation. Special attention will be given in the future to applications that contribute systematically to building new regional programs on community-based conservation in the Himalayas and East Africa, but the program is open to all applicants from the developing world. Applicants should be organizations that can demonstrate a long-term commitment to plant conservation. The maximum size of grant is normally £10,000. Applicants should be from developing countries. Applications are welcome from all regions, but synergy between applications will be considered in deciding which projects to support, as well as the potential to use the awards to build more substantial proposals. Projects designed to increase the sustainability of commercial harvesting are welcome. Awards can be for periods of up to 3 years.

  – Allachy Awards for Conservation of Medicinal Plants

Critical Ecosystem Partnership Fund
Deadline: No specific deadline
The Critical Ecosystem Partnership Fund (CEPF) is a global program with funds from a number for sources but administered by Conservation International. The program provides grants to nongovernmental organizations and other private sector partners to protect critical ecosystems and influence decisions that affect lives, livelihoods, and, ultimately, the global environment. There is no specific limit to the level of funding an applicant can request and project funding may be provided for a maximum duration of five years. The program funds conservation groups in the following areas: Caucasus, Eastern Arc & Coastal Forests, Eastern Himalayas, Northern Mesoamerica, and Succulent Karoo. Applications are available in English, Spanish and Russian.

  – Critical Ecosystem Partnership Fund

El Fondo de Alianzas para los Ecosistemas Críticos (CEPF)
Fecha límite: No hay fecha límite.
El Fondo de Alianzas para los Ecosistemas Críticos (CEPF) es una iniciativa que provee becas a organizaciones no-gubernamentales y otros socios del sector privado para proteger ecosistemas críticos y influir en las decisiones que impactan las vidas, y, el medio ambiente global. No hay un limite especifico de financiamiento, que un solicitante puede pedir y los fondos estarán proveídos por un máximo de 5 años. El programa patrocina grupos en las siguientes regiones del mundo: Caucasus, Eastern Arc & Coastal Forests, Eastern Himalayas, Northern Mesoamerica, and Succulent Karoo. Las solicitudes están disponibles en Español, Inglés, y Ruso.

  – Fondo de Alianzas para los Ecosistemas Críticos (MS Word)

DOEN Foundation Grants for Sustainable Development Enterprises
Deadline: At least four months before the activity starts.
DOEN Foundation works towards the achievement of a livable world in which everyone has a place. Acting within its four fields of operation of Sustainable Development, Culture, Welfare and Social Cohesion, it provides subsidies where necessary, and arranges loans and equity investments where possible. DOEN's primary focus in the area of Sustainable Development consists of social-cultural aspects ('people'), economic aspects ('profit') and ecological aspects ('planet'). Microfinance is still the most important instrument in this program. Nevertheless, in 2006, DOEN shifted its microfinance focus towards the development of the financial sector in the wider sense. It began to invest in organizations that help SMEs (small and medium-sized enterprises) get off the ground in developing countries, so as to be able to serve those businesses that have outgrown the microfinance stage. This has resulted in support being given to organizations that work directly with these enterprises.

  – DOEN Foundation Grants for Sustainable Development Enterprises


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