Environmental services (also called ecosystem services) are the benefits people obtain from ecosystems. Tropical forest environmental services perform a range of functions, such as: moderating weather extremes and their impacts; dispersing seeds; mitigating drought and floods; cycling and moving nutrients; storing carbon; protecting stream and river channels and coastal shores from erosion; detoxifying and decomposing wastes; controlling agricultural pests; maintaining biodiversity; generating and conserving soils and renewing their fertility; contributing to climate stability; purifying air and water; and pollinating crops and natural vegetation.
Tropical forests are often particularly important for carbon sequestration, biodiversity conservation, the protection of watersheds and the regulation of regional climates.
Because forests do many of these things for “free” they are rarely adequately valued. Many people who benefit considerably from tropical forest environmental services—such as urban dwellers, big industry and developed countries—pay little or nothing for them. This means that tropical forests are often undervalued compared with alternative land uses such as agriculture, ranching and urban development, leading to forest degradation and deforestation.
By providing tropical forest owners and managers with income and increasing the economic competitiveness of sustainable forest management (SFM), payment schemes for environmental services (PES) can help:
- Alleviate rural poverty
- Reduce tropical deforestation
- Stimulate the rehabilitation of degraded forestlands
- Increase the uptake of SFM.
The underlying principle is to internalize environmental benefits and costs that otherwise are not included in economic accounts with the aims of reducing and reversing forest degradation and deforestation and rewarding forest owners and managers for good forest stewardship.
Not all compensation for environmental services is financial. Some environmental-service providers may obtain considerable benefits from increased tenure security, for example, or from in-kind compensation such as support to increase food security.
There are many successful examples of PES schemes in the tropics, and action is needed to scale them up. ITTO works with its members to increase recognition of the importance and value of tropical forest environmental services and to expand PES through the tropics. ITTO has also done a great deal of work on REDD+, which is a form of PES with great potential to reward forest owners for SFM.