By Wubua Mekonnen, GEF Programme Specialist

I was a young post-graduate student of environmental economics in Australia when I first came across the term “ecosystem service”. I took a rather curious interest in exploring its meaning as it recurred in my readings and no sooner than later, I had a fair grasp of it. Ecosystem services are the diversified benefits derived from properly functioning ecosystems and environment. Ecosystems include forest, grassland, aquatic, mountain and agroecosystems and provide services such as timber, fishes, water and agricultural produce. 

Once back in Ethiopia, my passion for ecosystem services was fueled by  three facts: 

First, Ethiopia is one of 20 megadiverse countries in the world and one of the 12 centres of origin and diversity. The country also hosts the Eastern Afromontane biodiversity hot spot but Ethiopia has not benefited from this unique natural blessings;

Second, the damage is irreversible if we fail to properly value our ecosystem goods and services;

Third, women are the primary users of ecosystem services and as such will be the first to suffer if we see more ecosystem degradation. Payment for Ecosystem Services represents step in sharing benefits by communities through their participation in resource management.

Understanding Payment for Ecosystem Services

Payments for Ecosystem Services (PES) is payments for environmental benefits to the community as an incentive for managing their land to sustain these ecological services. Ethiopia's resources have been undervalued and considered as free goods. This has led to manipulation and uncontrolled utilization, in turn, resulting in the extinction of unique biodiversity resources and its ecosystem. 

For example, once abundant wildlife, such as the Rhino, now face extinction. Well-known lakes such as Lake Alemaya died as a result of overutilization of the resource.

To alleviate this national and global threat, UNDP secured GEF resources in 2015 to design and implement a project (2015-2019) intended to mainstream incentives for biodiversity conservation in Ethiopia. Through the project, support was provided for the conservation of four unique biodiversity hot spot areas in Amhara (Choke Mountain), Somalia (Hadew), SNNP (Diga Forest) and in Oromiya (Arjo Diga forest).

Initially, there was concern that the project idea would remain as a theory and could not implemented in the Ethiopian context. Many stakeholders, including government ministries, questioned the practicality of the project as the concept was quite new to the country. This was especially true when looking at the strategy of enhancing community stewardship for biodiversity conservation through the introduction of ecosystem service payment scheme. The other issue was on the possibility of reflecting biodiversity values in a national account through evidence-based biodiversity public expenditure review (PER).

The turning point came following investments in the production of data as well as a series of training and advocacy outreach to the policymakers, community and the general public. 

The project also piloted the PES scheme at its four conservation areas through area closure and active community involvement in protection and soil and water conservation. The community could see visible results on-the-ground in a relatively short period and this adds additional inspiration for community participation and management of restricted land uses. In Choke Mountain, about 13,000-hectare biodiversity critical area was conserved. Springs and rivers, which are tributaries of the Blue Nile, were revived and started flowing (with multiple benefits for the local community such as additional water supply, irrigation water, etc.). Lost flora and fauna returned to the area, downstream flood damage was controlled and crop yield improved in the area. This visible achievement convinced the regional government to declare an IUCN category VI Community based protected area. This opened the way for an agreement to be signed to make payments amounting to ETB 500,000 ETB ($17,241) to use Choke Mountain for research and educational purposes.

In Diga, about 12,000-hectare biodiversity critical area was conserved leading to the increase in the number of wildlife. Local communities become responsible for the wildfire control and signed voluntary PES Memorandum of Understanding.

In Kulfo, about 7,500-hectares of unique biodiversity area was conserved leading to the restoration of dry streams water supply for the community. Here also, lost flora and fauna returned to the area, wildlife became abundant and flood hazard on the Arbaminch town was controlled. As in the other pilot areas, a voluntary PES agreement was signed.

In Hadew 1500 hectares of degraded biodiversity hotspot area(which was converted to sand mining) area), was restored. As communities take ownership of the land, medicinal plants and different lost wildlife have returned to the area. As a result, the project site has become a harboring site for a large number of flora and fauna resources.

An effective community-based model for initial payment-for-ecosystem services (PES) schemes has been developed. And with funding by the public and private sector, 20 PES agreements have so far been put in place to conserve and rehabilitee community protected area. These community voluntary PES agreements have up to now generated over 7 Million ETB (244,000 USD).

The project has also helped Ethiopia to compile strong evidence on the values of biodiversity for the national economy. This was done through a biodiversity Public Expenditure Review (PER) and a study on the economic contribution of Ethiopia’s ecosystems to the national economy. The comparative analysis of the national GDP looked at what amount of fiscal resource has been allocated to the biodiversity sectors for the past fifteen years.

Today, the importance of environmental service payment has become an innovative domestic financing mechanism for biodiversity conservation. All stakeholders are also starting to appreciate the strong market-based mechanism to curb existing ecosystem degradation. 

This obvious fact has helped the Environment, Forest and Climate Change Commission to design a PES strategy, adopt the national strategy and initiate a PES legislation process. 

After a series of discussions with all relevant stakeholders, the country has a national law for payment for ecosystem services that provide rights and obligations on ecosystem service providers and users. So finally the PES theory has been turned into something tangible that Ethiopia can practice and benefit from.