Nasta Babirye¹, Sara Namirembe² and Byamukama Biryahwaho³

¹Nyabyeya Forestry College

²World Agroforestry Centre, ICRAF

³Nature Harness Initiatives

The viability of Payment for Ecosystem Services (PES) schemes to steer sustainable forest practices depends upon provision of sufficient compensation to forest owners for opportunity costs of foregone landuse alternatives. A project “Developing an Experimental Methodology for Testing the Effectiveness of PES to Enhance Conservation in Productive Landscapes in Uganda” was implemented in Hoima and Kibaale districts within the Albertine Rift to reverse the trend of removal of forest patches from privately owned agricultural lands. The project led by the National Environment Management Authority, was implemented by various partners including Nature Harness Initiatives. It paid 840 private forest owners (PFOs)Ush 70,000(US$33)ha^-1yr^-1for contractual forest management interventions. However PFOs found this compensation insufficient. To probe this, a survey was conducted to establish netpresent value (NPV) at 12% social discount rate of net benefits from forest management by 102 PFOs with intact forests (IF) and degraded forests (DF)before and under PES. Estimates considered the short (3 years- project period) and long (30 years – regeneration period for secondary forests)terms.

For the short term, NPVha^-1yr^-1under PES was lower for IF and DF (US$77.4and 61.4respectively) than before PES (US$137.6).  The same was true for the long term, where compared to NPVha^-1yr^-1 before PES (US$ 25.4), IF and DF were only US$20.5 and 15.1 under a 3-year PES compensation; and US$26 and 20.6 under a 30-year PES compensation. Therefore, even if theproject payment rate sustained for 30 years, it can compensate present landuse alternatives only for IF, but not for DF. Although this analysis did not take into consideration other benefits from not cutting down forests, the potential for payments alone to drive such a decision is quite low and may need to be supplemented by rules or norms.