Payment of Environmental Services in Aceh

By Dewa Gumay

PROGRESS of environmental issues on this decade, happening progress very fast, beginning from environmental degradation, conservation, and the new issue is scheme of Payment of Environmental Services (PES).

Actually, basis for PES theory was arise fifty years a go from a Britain economist at the Chicago University, Ronald Harry Coase in its article The Problem of Social Cost on 1960. On its article, Coase accept Economic Nobel on 1991. According to Coase, “in as much as environment loss gets monetary character therefore attained optimal solution will same, despite on whom property rights is given”.

Progress of PES issues has result many discussion and analysis of many parties, in progress than arising variously perspective, on the end will be emerging deviation and shifting tend from actually PES output. Question more importantly is what is PES, why, how, and when PES could be implementation, this article little explaining key question that.

According Sven Wunder, researcher from CIFOR, PES is payoff scheme to service provider to increasing quality and quantity environmental services, not payment to ecosystem it self. Formally, Wunder define PES tight, which is transaction that done just voluntary, cause payment, or not environmental services that constant is adrift. Ideally, payment is user environmental services and payoff is provider environmental services.

On watersheds management congress year 2003, for third country at the America Latin region, PES defines compensation mechanism where’s provider environmental services paid by user environmental services. While for water services and river basin protected, PES define as implementation market mechanism, given compensation to community as land owners on the river upstream that they are do conservation area and not change land function which is effect to provider and water quality on the river downstream.

Why using PES scheme? Goal of PES is a pushing utilize of natural resources more efficient and responsible. If, there is no directly intervention from public, threat to environmental damage will more increase, availability of environmental services wills be scarce, and arise variously environment problems, such as flooding, drying, landslide, global warming, and climate change. Community pushed to accept responsibility ecosystem management and remove incentive in the using natural resources.

Cheap over price pushing peoples to consumption to much from ideally, so arise inefficiency and environmental damage. PES expected has correction deviation of price environmental services too low, namely zero while there is no payment of environmental services.

Actually, there are several corrections about place PES water perspective into market mechanism. Cause, in Indonesia context, rights for water is constitutional rights every citizenship or public goods. If we references of water management model like government through PDAM (local corporate in Indonesia), PDAM is stage of PES define. While PDAM self not given payment to water provider or community on the upstream river. Eventually, the economics analysis, PDAM have taken commercial benefit from water providing on the upstream river.

Doribel Herrador and Leopoldo Dimas, agronomist and environmental economist researcher from El Salvador countries, differentiate between PES and incentive, according to him, incentive is short term, while PES is permanent and long term up to environmental services that constant adrift.

Implementation of PES

How to implementation PES is a difficult process, one of the group have perspective that PES must performed with voluntary scheme. Its mean, the transaction between provider and user services must be done independently and no intimidation from other parties, or allegorized transaction goods and services in the market.

In several case studies, river basin one of the models to implementation PES, river basin upstream is providing environmental services, and river basin downstream is using environmental services. In river upstream context, scheme of payment of environmental services can be paid if there seriously effort and continue from community peoples in the protected area and quality environmental services, in this case is water. Water providing and quality depends on quality of forest cover and exploitation model at the river.

Meanwhile in river downstream context, water user is benefit receiver or party must be pay, what is the direct use, such as PDAM or industries and hotels that have water processing, or to non-direct benefit receiver, as household.

Therefore needed an aware and highly sense from benefit receiver of environmental services, so they feel readily pay to provider services. On the next step, if benefit receiver readily to pay, will arise new problem, who payment that given? If payment that are not right people or not fair, of course needed true parameters.

Scheme of PES in Aceh

What is scheme most right to implementation in Aceh? If use PES theory voluntary scheme very difficult to implementation, increasing awareness user environmental services or buyers very difficult to hoped, even to avoiding because using of environmental services is a something are adrift perpetually, and used any time. That thing can be understood, because lifespan standard in Aceh most of low, although PES voluntary could be implemented to group or core business.

Therefore, government intervention needed very absolute, obviously many corrections might be government to do, in this case transparency and management partisan on fairness and took basis for people’s constitution on environmental services as public goods.

Many approaches and scheme to do in PES management, market approaches might be second optional, with judgment that very difficult and height cost to create a environmental services market.

Conclusion of PES scheme is pushing people’s affluent which contribution in the protecting natural resources, with notes that river downstream or benefit receiver or payment parties, its logic mostly riches than river upstream or provider services or parties which payment given. If not, there is no PES scheme. []