Payment for Ecosystem Services (PES): Case Studies from India

1. Case Study 1: Mahogany Project in Bastar (MVAPL)

Overview:

• Project Type: Agroforestry with fast-growing mahogany trees on community land
• Participants: Smallholder farmers
• Promise: Share of revenue from carbon credits via carbon sequestration

Implementation:

• Registered with international carbon registries (e.g., RERA)
• Sold voluntary carbon credits on the global market

Issues:

• Lack of Transparency: Farmers did not fully understand carbon contracts
• Unequal Revenue Sharing:
  • Company retained most revenue (citing expenses/risks)
  • Only 12% of earnings reached farmers
• Flawed PES Model: Service providers (farmers) severely undercompensated

Key Failure:

• Top-down, market-driven approach
• Lack of local involvement and awareness

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2. Case Study 2: Sukhomajri Watershed Project (Haryana)

Overview:

• Period: 1970s–1980s
• Location: Chandigarh’s catchment hills
• Initiative: Community-led watershed management

Actions:

• Soil conservation
• Afforestation
• Water harvesting

Outcomes:

• Reduced siltation in Sukhna Lake (water source for Chandigarh)
• Improved local ecology and water availability

PES-like Mechanism:

• Service Provided: Ecosystem services (reforestation, water regulation)
• Compensation: Exclusive use rights over forests and water resources
  • Grazing rights
  • Access to non-timber forest products
• Success Factors:
  • Community-driven (not market-imposed)
  • Clear, tangible benefits for locals
  • Government support with legal recognition

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3. Comparative Analysis: Bastar vs. Sukhomajri

Aspect	Bastar Mahogany Project	Sukhomajri Watershed Project
Driver	Global carbon market	Local ecological need
Community Role	Passive participants	Active leaders
Transparency	Low (contracts unclear)	High (clear rights & benefits)
Revenue Sharing	Unequal (12% to farmers)	Equitable (resource rights)
Sustainability	Low (exploitative)	High (community-owned)
Model	Market-led PES	Community-led PES

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4. Lessons for Effective PES

• Local Ownership: Projects must be community-driven, not externally imposed
• Transparency: Clear contracts and fair revenue sharing are essential
• Tangible Benefits: Compensation should be direct and meaningful (e.g., resource rights, not just cash)
• Trust Building: Involve communities in design and decision-making
• Beyond Carbon: Prioritize local ecological and social benefits over global market demands

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5. Conclusion: What Makes PES Work?

• PES is most effective when:
  • Locally rooted
  • Equitably designed
  • Aligned with community needs
• Global carbon markets risk exploiting vulnerable communities
• Sukhomajri remains a benchmark for just and sustainable PES in India

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📘 Exam Tip

Compare and contrast the Bastar and Sukhomajri cases to highlight the importance of community involvement, transparency, and equitable benefit-sharing in PES schemes. Use specific data (e.g., 12% farmer share in Bastar) to illustrate failures, and emphasize Sukhomajri’s success through local ownership and tangible benefits. Always link back to the principles of justice and sustainability in ecosystem service management.