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This paper is the fifth in a series of nine interlinked papers commissioned by the Rural Poverty and Environment Programme (RPE) of the International Development Research Centre (IDRC) as part of a research project entitled scoping study of compensation for ecosystem services. The purpose of this project is to provide the RPE with a broader and richer deliberation on the potential for economic instruments (including market, financial and incentive-based instruments), which conserve ecosystem services and at the same time contribute to poverty reduction in the developing world. This paper is prepared by IUCN – The World Conservation Union, The United Nations Environment Programme (UNEP), Forest Trends, Corporacion Grupo Randi Randi (CGRR), and the World Agroforestry Centre (ICRAF). The purpose of this paper is to develop in-depth understanding of the interface between Compensation and Rewards for Ecosystem Services (CRES) and human well-being, namely how, where and when CRES options are relevant to poverty reduction and the well-being of the poor. CRES in the context of this paper is being explored as: compensation for ecosystem services (CES) in monetary or non-monetary payments made by those whose actions modify ecosystem services in a way that is perceived to be harmful to the ecosystem and thus its services (the proverbial polluters pay principle); and rewards for ecosystem services (RES) in monetary or non-monetary payments made to those whose actions modify ecosystem services in exchange for undertaking good stewardship or guardianship of the ecosystem (the beneficiaries pay principle). This paper explores the relationship between CRES and poverty reduction and the well-being of the poor through the Millennium Ecosystem Assessment (MA) framework. The MA framework has been instrumental in examining and revealing the inter-linkages, synergies and trade-offs between (and among) ecosystem services, and between ecosystem services and human well-being. The framework provides a unique pathway to understanding CRES’s potential ability to reduce poverty by considering where synergies are possible and where trade-offs are inevitable. This framework has important implications for an approach that pursues conservation and poverty reduction jointly.

Exploring the inter-linkages among and between compensation and rewards for ecosystem services (CRES) and human well-being ICRAF Working Paper no. 36