Program for the Payment of Hidrological Environmental Services of Forests: Implementation and targetting Josefina Braña Varela, Carlos Muñoz Piña INSTITUTO NACIONAL DE ECOLOGÍA

Program’s Objective Stop the deforestation that threatens those forests critical for watershed-related environmental services in Mexico Foster the development of local markets for environmental services By Paying land owners to preserve forest land and avoid its transformation for other uses, such as: agriculture and cattle raising.

Rules of Operation for PSAH ( ) Good quality Forests & Forests important for water With potential future clients Providing other environmental services? & Overexploited acquifers 80% cover H related natural disasters High water scarcity zones or Cities > 5K Priority Mountains Natural protected areas

Challenges for PES Unexpected success: Three times as many applicatons as funds. (Excess demand) Lets look at the actual targetting

Targetting: By type of forests By type of environmental service By level of poverty By risk of deforestation  Important: voluntary program implies selfselection.

Type of forest Tipo de Vegetación All of Mexico PSAH 2003 PSAH 2004 "Elegibility" CONAFOR '04 Coniferous Oaks Cloudforest Dry tropical forests Rainforest Total 100

Targetting types of forests

Overexploited aquifers Type of Acquifer Nationwide (surface) Nationwide (population) Hectares benefited by PSAH in 2003 Extreme Overexploitiation (+100% a +800%) 0.05 %9.2%0.02 %0.00 % Fuertemente Sobreexplotados (+50% a +100%) 0.04 %19.5%0.00 % Sobreexplotación Moderada (+5% a +50%) 18.6 %14.5%13.3 %9.61 % En equilibrio (- 5% a +5%) 2.9 %11.3%0.01 %0.00 % Con margen de expansión (< - 5%) 65.1 %45.4%78.7 %85.04% Sin información 13.4 %0.1%8.0 %5.3 % TOTAL %100.0 %

Aquifers

Surface water scarcity Zona de Disponibilida d de Agua* Superficie a nivel nacional (%) Población que vive en la zona (%) Hectáreas beneficiadas por PSAH en 2003 (%) Hectáreas beneficiadas por PSAH en 2004 (%) 1 (mayor escasez) (menor escasez) TOTAL 100.0

Water scarcity

Poverty Marginality PSAH 2003PSAH 2004 Total Nacional en Propiedades Sociales con >100 has de bosque Hectáreas % % Muy Alta Alta Media Baja Muy Baja Total 100

Targetting poverty

SEEKING EFFICIENCY Objetive: Maximize protection of environmental services through avoiding deforestation Efficiency: Maximize value to fee-payers through avoiding maximum hectares deforested at minimum cost, within budget constraint.

Main driving force: land use changes. More profitable agricultural and cattle ranching activities. Short term horizon caused by poverty (Guevara:2002). Specific patterns identified through econometrics: transport cost, slope, potential ag yields. How to measure real risk of deforestation?

20% 40% 60% 80% 100% Secundario sin cambioSecundario deforestado Primario conservadoSecundario regeneradoPrimario degradado Primario deforestado 0% Land use changes and distance to market MINUTOS

Land use changes and slope

Risk of deforestation Índice de Riesgo de Deforestació n (por quintiles) Bosques a nivel nacional PSAH 2003PSAH 2004 Superficie Elegible CONAFOR % Ha % % Muy Alto 20%4% 5,922 11% 18,550404,549 12% Alto 20%7% 11,034 17% 28,529198,762 6% Medio 20%17% 28,446 20% 34,953613,763 18% Bajo 20%30% 50,046 30% 50,940856,519 25% Muy Bajo 20%42% 68,815 22% 37,1331,350,704 39% Total100% 164, % 170,1053,424, %

Targetting: risk of deforestation

Ejercicio de priorización