Streamlining Monitoring for Smallholder and Community PES (SMS-PES)

Lead Research Organisation: International Institute for Env and Dev
Department Name: Sustainable Markets Group

Abstract

Transaction costs are one of the main challenges for smallholders and communities in accessing international carbon and other, nascent, ecosystem services (ES) markets. A large proportion of these costs are associated with the development of credible methodologies for monitoring to offer reassurance along the value chain that land use practices result in the delivery of ecosystem services. This is especially true for smallholders and community projects with multiple, scattered small properties, for whom meeting environmental thresholds and economies of scale remains difficult, yet the social and environmental cost of leaving them out is not a viable option in many developing countries. At the core of our proposal is the testing of scientifically robust methodologies for cost-effective monitoring of small farmers and community ES projects, which will contribute to poverty alleviation by 1) improving access to these emerging markets, and 2) allowing a higher proportion of the money to go to farmers rather than project management.

Monitoring of emerging markets for ES presents a varied picture across the world, and it is strongly linked to how indicators for ES are initially defined. Many watershed and/or biodiversity protection projects combine type of activity (e.g. forest protection) with some level of targeting (e.g. riparian areas, biological corridors) as indicators of provision. Monitoring is then focused on monitoring land cover or land use, rather than outcomes (e.g. number of species). International carbon markets have been stricter in approaches to carbon stocks and monitoring to ensure that offsets are real and verifiable. International standards provide credibility and can lead to price premiums, however they often are expensive and cumbersome (Corbera and Brown, 2010a; Skutsch et al., 2009) and the transaction costs associated become active barriers that often lead to the exclusion of smallholder and community projects (De Pinto et al., 2010) .

With a budget under 500k, this sleek proposal integrates cutting-edge scientific analysis, with a novel application of choice experiments, to address the question of what is an optimal level of monitoring in carbon forestry projects. By 'optimal', we mean a monitoring strategy that satisfies the needs of buyers of ecosystem services credits and minimises effort and resources required such that these resources can reach smallholders. We focus directly on monitoring carbon and other ecosystem services (biodiversity and to a smaller degree watershed services) and their implications along the overall value chain for these ES: 1) at the Offset Creation level (eligible smallholder and community-based practices and measurable indicators for carbon, BD, and social co-benefits); 2) at the Verification of Value of offset stage (third party Standards); and 3) at the Articulation of Demand for Offsets stage (platforms for specific characteristics).

Following a literature review, we will examine four different methodologies according to their scientific robustness and capacity to measure and monitor carbon and associated ecosystem services. We will then test at the local level in three different locations (Plan Vivo certified projects in Mexico, Uganda and Sri Lanka) to account for the practicalities of implementation it in terms of protocols for approved practices and offset creation, but also in terms of available information, costs and local capacity. At the other end of the value chain, we will test how buyers react to these methodologies in terms of perceived project credibility for service delivery, and their potential willingness to pay for different combinations of ecosystem service credit offsets against cost of monitoring them. Throughout the project we will work with the Plan Vivo Foundation and local project implementers, to ensure that the methodology responds to the practicalities of verification and aggregation of offsets.

Planned Impact

The project will generate key information on empirical knowledge on indicators and monitoring systems for carbon and associated ecosystem services. This information will help communities in developing countries access to sustainable markets (e.g. not just Plan Vivo) for payments for services rendered by their ecosystems, which in turn would incentivize ecosystem conservation/restoration, and contribute to poverty alleviation.

Our beneficiaries fall into:
1. local stakeholders including local practitioners and implementers of Ecosystem Services Projects; local universities, small local and regional NGOs and community organisations,
2. conservation organisations locally and globally (e.g. TNC, WWF, WCS, IUCN)
3. investors in ES interested in buying and trading in ecosystem service credits. This includes commercial stakeholders (i.e. those buying PV credits), oil and gas, industry, and energy sector.
4. bilateral aid agencies (DfID, Danida, Sida, Cida, GTZ), and development banks (e.g. IDB, ADB),
5. policy organisations and platforms interested in promoting pro-poor ES deals (e.g. IPBES, UN-REDD, REDD in-country focal points). We will target regulatory processes and standard setting bodies for REDD+ (e.g.CCBA and VCS) and national and international safeguarding processes (World Bank FCPF promoting SESA alongside the developing UN-REDD Social and Environmental due diligence process).
6. Governments interested in including ecosystem services in their planning.
7. We will link to current sustainability initiatives in which consortium members are involved including TEEB (UNEP-WCMC), the Green Economy Initiative (UNEP-WCMC) and the Green Economy Coalition (IIED).

The consortium has significant on the ground presence and partnership in the regions and strong partnerships with development, policy and commercial stakeholders. Through the Plan Vivo project partners we ensure our work in Latin America, Africa and Asia. Over the years, IIED has developed a substantial information exchange platform. Internally, it has a dedicated communications team that advise on the best way to ensure use of adequate and targeted communication of policy-impact findings and recommendations at different levels. The expertise from the University of Edinburgh and the University of Exeter will provide the scientific and academic robustness required for ESPA.

We will ensure that our outputs are written in a language accessible to different audiences. This includes materials for practitioners, like guidance tools; journal and peer-reviewed publications for the academic audience, policy briefs oriented to policy-makers (see form example the format of IIED Briefings and Reflect and Act), and blogs oriented to generate reaction from the media and wider audience. The team will also participate in ESPA hosted events, like conferences and other events. For this, we have budgeted £20,000 for publications, and another £20,000 for workshops, conferences, and travel, equivalent to 10% of the total funding.
 
Title SHAMBA - Powering Smallholder Climate Action 
Description A video documenting the outcomes of the SMSPES project and encouraging PES schemes and other agroforestry initiaitves to use and further develop SHAMBA. 
Type Of Art Film/Video/Animation 
Year Produced 2015 
Impact It was circulated to SMSPES researchers' professional networks, as well as played in the Plan Vivo stall at the Global Landscape Forum in Paris in December 2015. Along with other outputs, it has helped to increase interest in SHAMBA and SMSPES findings. This includes on going discussions and advice to existing and potential PES developers and commercial plantation operators. 
URL https://www.youtube.com/watch?v=_r33Fiba2Wc
 
Description This project sought to test and optimise monitoring tools for smallholder agroforestry projects with regard to accuracy, costs, local legitimacy and local equity. There are four key findings:

1) Out of the tested agroforestry monitoring tools, those tools that had a high spatial resolution (i.e. farm-level as opposed to regional-level) and included field visits increased accuracy and project flexibility (and potentially profitability) for farmers, while having little impact on costs, perceived equity and perceived legitimacy of PES projects. However, there were marginal returns to this pay off. Plot-level monitoring is beneficial but should only be as complex as necessary to provide the accuracy/flexibility pay off. Complexity and cost in plot-level project design and monitoring should not be an entry barrier for smallholders.

2) Tested tools that involved fewer or no field visits (i.e. remote sensing) performed poorly in accuracy, cost, local legitimacy and equity. The accuracy and costs of these tools could be improved, but the low local legitimacy and equity issues may remain. Therefore, the tested remote sensing tools are not a good option for smallholder agroforestry schemes. However, remote sensing may work for other larger REDD-type interventions (this study did not investigate REDD-type interventions).

3) With regard to buyers, the choice of monitoring regime appeared to have little or no impact on buyers preferences for different carbon offsets. Buyers preferences were more related to price and perceived co-benefits of a project. Smallholder agroforestry projects are thus empowered to reform their monitoring without fear of losing buyers, as long as the reforms do not impact local co-benefits and related legitimacy and equity.

4) Participants reported that a key factor in successfully attracting buyers was marketing and provision of information. Smallholder projects may thus benefit from investments in efficient data management, communications and marketing.
Exploitation Route 2020/21. There is a strong political interest on monitoring systems for carbon emissions in Nature-Based Solutions. The findings from this research are being shared to FCDO, DEFRA and BEIS and are used to help shape the programming.

A number of potential follow-on projects to streamline monitoring in practice and develop new systems and technologies are being developed with partners.

The existing briefings provide guidance on how to help smallholder access carbon markets.

A technical paper on 'how to produce a good carbon offset', due next year, will provide further guidance for projects. An updated version of the GHG accounting tool (SHAMBA) will also be made available online.

The findings on monitoring tools could help to rationalise and simplify existing approaches, which in turn may support upscaling.
Sectors Agriculture, Food and Drink,Communities and Social Services/Policy,Environment,Government, Democracy and Justice

 
Description I recently moved to work at DFID as economics adviser. An important part of my brief is to ensure that we bring the latest results from key research into the design of new strategic programmes. I'm able to share directly to my colleagues within DFID, DEFRA and now FCO some of the main results from my own research and that of other projects under ESPA.
First Year Of Impact 2019
Sector Agriculture, Food and Drink,Communities and Social Services/Policy,Environment,Government, Democracy and Justice
Impact Types Societal,Economic,Policy & public services

 
Description 2013 Stakeholder meeting: Climate Justice in Practice 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact We used the Plan Vivo Stakeholder meeting as entry point to understand how project practitioners, brokers, and resellers perceive the role of monitoring in the context of smallholder carbon projects. We introduced the project to the general audience of Plan Vivo projects and provided opening for further engagement with projects apart from the two cases used in our study.

We have had other contacts from project practitioners interested in improving monitoring strategies within their projects, and sharing information of their own monitoring process with us. Very importantly, it helped our ESPA team to target the objective of our research to what is really needed in the practice and ensure that results will be of use to projects on the ground.
Year(s) Of Engagement Activity 2013
URL http://www.planvivo.org/docs/2013-Meeting-Report-final.pdf
 
Description 2014 Equity and Inclusion in Smallholder PES workshop 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact It gave the opportunity for designing research objectives in ways that responded to real needs on the ground

We organised a fieldwork Plan and made links other potential collaborators
Year(s) Of Engagement Activity 2014
URL http://pubs.iied.org/pdfs/16579IIED.pdf
 
Description 2014 Insetting workshop 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact During an INSETTING event in London, we presented the monitoring tool "SHAMBA", conceptualised by the University of Edinburgh and currently being tested in two sites as part of our project. Shamba was presented as a tool to introduce scientific rigour to carbon estimates at reasonable costs.

We got a lot of interest not only in the biophysical tool (Shamba) but further implications of the results of our research.
Year(s) Of Engagement Activity 2014
URL http://www.planvivo.org/one-day-capacity-building-workshop-on-insetting/
 
Description 2015 Capacity building workshop, Uganda 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact There were many discussions on PES monitoring methods and a sharing of knowledge

A number of groupings for future projects to develop web-based monitoring systems were formed.
Year(s) Of Engagement Activity 2015
 
Description 2015 Improving Livelihoods and Restoring Ecosystems Conference 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact The talk raised the profile of Smallholder PES in the region and outlined a vision for improving livelihoods through PES in Uganda

Several methods for smallholder PES project management and monitoring were demonstrated at the end of the event, leading to many linkages with organisations
Year(s) Of Engagement Activity 2015
URL http://ecotrust.or.ug/espa-conference-2015/
 
Description PES monitoring tools presentation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact The presentation was given at two conferences in 2015 (Plan Vivo Stakeholder conference in Sweden and Capacity building workshop, Uganda) and provided a range of technical tools and guidance, which has been picked up by various practitioners.

Discussion are on-going on future technical development and research of PES monitoring methods.
Year(s) Of Engagement Activity 2015
 
Description Plan Vivo Stakeholder conference in Sweden, September 2015 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Following a range of presentations, there were many discussions on monitoring and barriers to entry for smallholders

Proposals for further development of monitoring systems were taken forward, and a wide range of feedback was collected to help with the SMSPES research
Year(s) Of Engagement Activity 2015
 
Description Smallholder PES monitoring tools presentation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact The talk resulted in a number of collaborations that are now being taken forward

After the talk, the Nakau program expressed interest in collaborating with the University of Edinburgh
Year(s) Of Engagement Activity 2015