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The complexity of the institution of payment for environmental services: A case study of two Indonesian PES schemes

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  • Fauzi, Akhmad
  • Anna, Zuzy

Abstract

Payments for Environmental Services (PES) have been widely adopted worldwide as a new market-based initiative for conservation and environmental management. In Indonesia several PES initiatives exist ranging from watershed and terrestrial to marine ecosystem. Nevertheless, developing and managing PES programs in Indonesia are exacerbated by the complexity of institutional arrangements. Fiscal constraints are still the main obstacle of sustainable financing of PES mechanism. Rules and regulations with regard to PES fiscal mechanism are rather lacking, making it difficult for effective management of PES programs. As a consequence, efficient mechanism between users (firms) and environmental services is rather weak. This paper explores such a problem based on case studies of two existing PES programs in Indonesia. The paper analyzes the complexity of fiscal mechanism as a derivative of regulations and discusses challenges to overcome the constraints.

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  • Fauzi, Akhmad & Anna, Zuzy, 2013. "The complexity of the institution of payment for environmental services: A case study of two Indonesian PES schemes," Ecosystem Services, Elsevier, vol. 6(C), pages 54-63.
    • Handle: RePEc:eee:ecoser:v:6:y:2013:i:c:p:54-63
    DOI: 10.1016/j.ecoser.2013.07.003
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    4. Lien, Aaron M. & Schlager, Edella & Lona, Ashly, 2018. "Using institutional grammar to improve understanding of the form and function of payment for ecosystem services programs," Ecosystem Services, Elsevier, vol. 31(PA), pages 21-31.
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    7. Rebecca A. Riggs & James D. Langston & Chris Margules & Agni Klintuni Boedhihartono & Han She Lim & Dwi Amalia Sari & Yazid Sururi & Jeffrey Sayer, 2018. "Governance Challenges in an Eastern Indonesian Forest Landscape," Sustainability, MDPI, vol. 10(1), pages 1-18, January.
    8. Chen, Cheng & Matzdorf, Bettina & Meyer, Claas & König, Hannes & Zhen, Lin, 2018. "How socioeconomic and institutional conditions at the household level shape the environmental effectiveness of governmental PES: China’s Sloping Land Conversion Program," SocArXiv jzvqh, Center for Open Science.
    9. Hunggul Yudono Setio Hadi Nugroho & Fitri Nurfatriani & Yonky Indrajaya & Tri Wira Yuwati & Sulistya Ekawati & Mimi Salminah & Hendra Gunawan & Subarudi Subarudi & Markus Kudeng Sallata & Merryana Kid, 2022. "Mainstreaming Ecosystem Services from Indonesia’s Remaining Forests," Sustainability, MDPI, vol. 14(19), pages 1-39, September.
    10. J. Carl Ureta & Lucas Clay & Marzieh Motallebi & Joan Ureta, 2020. "Quantifying the Landscape’s Ecological Benefits—An Analysis of the Effect of Land Cover Change on Ecosystem Services," Land, MDPI, vol. 10(1), pages 1-20, December.
    11. Bösch, Matthias & Elsasser, Peter & Wunder, Sven, 2019. "Why do payments for watershed services emerge? A cross-country analysis of adoption contexts," World Development, Elsevier, vol. 119(C), pages 111-119.
    12. Diswandi, Diswandi, 2017. "A hybrid Coasean and Pigouvian approach to Payment for Ecosystem Services Program in West Lombok: Does it contribute to poverty alleviation?," Ecosystem Services, Elsevier, vol. 23(C), pages 138-145.
    13. Sattler, Claudia & Matzdorf, Bettina, 2013. "PES in a nutshell: From definitions and origins to PES in practice—Approaches, design process and innovative aspects," Ecosystem Services, Elsevier, vol. 6(C), pages 2-11.
    14. Jaung, Wanggi & Putzel, Louis & Bull, Gary Q. & Kozak, Robert & Markum,, 2016. "Certification of forest watershed services: A Q methodology analysis of opportunities and challenges in Lombok, Indonesia," Ecosystem Services, Elsevier, vol. 22(PA), pages 51-59.
    15. Rajesh K. Rai & Mani Nepal & Laxmi D. Bhatta & Saudamini Das & Madan S. Khadayat & E. Somanathan & Kedar Baral, 2019. "Ensuring Water Availability to Water Users through Incentive Payment for Ecosystem Services Scheme: A Case Study in a Small Hilly Town of Nepal," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-26, October.
    16. Jagath C Edirisinge, "undated". "Distributional Impact of Climate Change on Smallholder Agriculture in Sri Lanka," Working papers 107, The South Asian Network for Development and Environmental Economics.
    17. Gregory Smith & Brett Day & Amy Binner, 2019. "Multiple-Purchaser Payments for Ecosystem Services: An Exploration Using Spatial Simulation Modelling," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 421-447, September.
    18. Dang, Anh Nguyet & Jackson, Bethanna Marie & Benavidez, Rubianca & Tomscha, Stephanie Anne, 2021. "Review of ecosystem service assessments: Pathways for policy integration in Southeast Asia," Ecosystem Services, Elsevier, vol. 49(C).
    19. Hejnowicz, Adam P. & Raffaelli, David G. & Rudd, Murray A. & White, Piran C.L., 2014. "Evaluating the outcomes of payments for ecosystem services programmes using a capital asset framework," Ecosystem Services, Elsevier, vol. 9(C), pages 83-97.
    20. Hao Wang & Sander Meijerink & Erwin van der Krabben, 2020. "Institutional Design and Performance of Markets for Watershed Ecosystem Services: A Systematic Literature Review," Sustainability, MDPI, vol. 12(16), pages 1-26, August.
    21. Beeju Poudyal & Suraj Upadhaya & Suman Acharya & Bir Bahadur Khanal Chhetri, 2021. "Assessing Socio-Economic Factors Affecting the Implementation of Payment for Ecosystem Services (PES) Mechanism," World, MDPI, vol. 2(1), pages 1-11, February.
    22. Wanggi Jaung & Louis Putzel & Gary Q. Bull & Diswandi Diswandi & Witardi & Markum, 2019. "Temporal Reliability of Willingness to Pay for Payments for Environmental Services: Lessons from Lombok, Indonesia," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-22, October.
    23. Zhenglei Xie & Bing-Bing Zhou & Hanzeyu Xu & Le Zhang & Jing Wang, 2020. "An Agent-Based Sustainability Perspective on Payment for Ecosystem Services: Analytical Framework and Empirical Application," Sustainability, MDPI, vol. 13(1), pages 1-18, December.
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