26th January 2021
Environmental services are components of the ecosystem that can be consumed or used to produce human well-being. Landowners and farmers are in the unique position of being able to reduce environmental damage to local ecosystems and even act to conserve them.
Payment for environmental services (PES) are relatively new schemes that seek to offer payment to landowners to implement good agricultural practices and protect the environment. Bonsucro recently worked with five other organisations on a study to investigate whether it is possible to implement PES within the sugarcane supply chain by recognising good environmental practices of sugarcane producers as providers for environmental services.
The project was sponsored by Earth Innovation Institute under its Forests, Farms & Finance Initiative and executed by Bonsucro and its members Orplana (Organization of Associations of Sugarcane Producers of Brazil), Socicana (Association of Sugarcane Growers of Guariba) and Solidaridad Brazil. The project also received technical assistance from Geoflorestas consultancy.
Phase one – research and insight
The project’s initial desk-based research was carried out using key words relating to PES in both English and Portuguese in public sources of information. The data was then analysed to understand which were of particular interest or relevance in a sugarcane context. Each of the selected initiatives were classified into one of five categories: resources management, water resources management, biodiversity conservation, forest conservation or carbon credit.
Executive summary tables with key information for each of the elected initiatives were then created. The projects were also plotted on both global and regional maps. These are all available to view here.
Phase two – deepening learnings
The objective of phase two was to deepen the initial learnings from phase one by consulting with specialists to explore the challenges and opportunities of PES in the sugarcane context. Fifteen stakeholders were interviewed – six from the public sector and nine from private institutions.
The virtual interviews were recorded, and all followed a semi-structured set of questions. The recordings were then analysed to rank the priorities of environmental services in each sector and collect the insights relating to the implementation of initiatives relating to sugarcane production.
Results – challenges and opportunities
The initial phase of the project showed 76 PES projects, with many that could provide teachings for the sugarcane sector. Fifty projects with the most relevance to sugarcane were included in the summary tables and maps. These 50 initiatives spanned 16 countries, across all continents.
PES programmes were recognised by all respondents in phase two as an important stimulus for environmental conservation practices. It was also widely stated that they can be very effective, but only if their criteria are clear. They can help to mobilise farmers and landowners to understand the real value of their land and offer incentives to conserve and restore forest areas.
Based on the interviews, it is possible to summarise three main benefits identified for PES initiatives:
- Adding financial value to farmers while ensuring environmental preservation
- Offering guidance on the practices for preserving land/habitats
- Enhancing livelihoods within the region the initiative is developed.
The interviews revealed some common priorities of environmental services across both the public and the private sector. The top was biodiversity conservation, followed by forest conservation. Water resources management and carbon credits were also frequently mentioned. Some participants used the premise that, by preserving forests, would start a chain reaction and all other environmental services would be positively impacted.
The interviews gave a total of 236 raw insights into PES initiatives. These were then grouped into seven key insights, two of which are challenges and the remaining five are opportunities for PES programmes in the sugarcane sector.
- There is a lack of common understanding on the fundamentals of PES and therefore education is needed
There was some confusion about the term PES and what falls under that label. In addition, it is also seen as an academic concept. All participants noted the need for setting clearer definitions and guidelines and then to communicate clearly about them.
- There isn’t an ideal PES model and each initiative should be structured to meet local needs and include unique performance indicators
Many existing projects and practices that positively contribute to the environment could be labelled as environmental services, however many are not. In addition, many participants noted local actions are easier to define for a PES programme than global services. This further demonstrates the need to define PES frameworks and who should pay for them.
- Agriculture and environmental conservation are complimentary
According to interviewees, agriculture and environmental conservation are widely seen as separate issues. Many landowners do not realise the risks that climate change bring to farming. Therefore, we should better communicate data and facts to support this.
- The market increasingly recognises good agricultural practices that preserve natural habitats
Different actors, such as investors and brands, incentivise the adoption of best agricultural practices. Both legalisation and voluntary initiatives were recognised as important drivers of environmental improvements. However, there’s a slightly higher preference for market initiatives.
- PES models have potential to create positive environmental impacts and there is a growing appetite for them
The many benefits of existent PES programmes such as the potential to change behaviours, prevent deforestation and combat climate change were acknowledged. Company commitments, Brazil’s new agribusiness law and the Central Bank’s sustainability agenda all welcome PES programmes.
- Certification can be understood as one PES model that enables environmental services provided by farmers, although it’s not entirely accepted as such
There is a need to increase awareness of certification systems at consumer level. Certification is seen as a reliable mechanism to assure traceability, but modernising transparency through technology could be beneficial.
- Sugarcane farmers essentially already provide different environment services and should be eligible to access PES programmes
There was no doubt that sugarcane farmers are providers of various environmental services, from carbon sequestration to biodiversity conservation. RenovaBio is currently the most adopted PES program in Brazil for the sugarcane sector. However, Brazilian farmers are often criticised by the media so some support in communicating achievements based on credible data would be useful.
Following on from the study, the aim is to address the challenges and explore the opportunities by a set of actions to advance with the PES agenda in Brazil, specifically in the context of sugarcane. The project concludes with five recommendations for the future.
- Coordinate discussions to mature the concept of Payment for Environmental Services within the sector.
- Get familiar with and contribute to disseminating existing PES programmes among sugarcane farmers.
- Improve knowledge on methodologies and frameworks used to measure and quantify different environmental services.
- Engage with both public and private initiatives in the sector to adopt existing PES models and create new ones.
- Prepare more attractive business materials for sugarcane farms based on credible data, measurable KPIs and a robust story, as well as sharing these with the media.