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npj Climate Action volume 3, Article number: 52 (2024)
Metrics details
Payment for Ecosystem Services (PES) can promote different types of governance arrangements to address the triple challenge of biodiversity loss, climate change and air pollution. These institutional arrangements, however, do not explicitly incorporate climate change into the ecosystem’s capacity to provide services. In this study, we explore why and how to incorporate climate uncertainties using as example the Altos de Cantillana Nature Reserve, a unique biodiversity hotspot in Central Chile. First, prioritized ecosystem services (ES) were grouped in bundles and linked to measured and modeled impacts of climate change on key water-related processes. Second, institutional barriers to PES were identified from case studies and analyzed considering challenges in a changing climate. Finally, bundles with different levels of risk were matched to six recommendations that better incorporate levels of risks to the uncertainty of climate change into Payment for Ecosystem Services in Chile.
Advancing the Sustainable Development Goals requires simultaneously addressing climate change biodiversity loss, and air pollution challenges (see Post-2020 Global Biodiversity Framework and the Kunming–Montreal Global Biodiversity Framework). The protection, and restoration of forest ecosystems is an essential local climate action that addresses the triple challenge as it is connected to important cross-scale ecosystem services, i.e., the goods and processes provided by ecosystems, in this case forests, which result in direct (e.g., food products) and indirect (e.g., carbon sequestration) benefits to human wellbeing. In this way, ecosystem services (ESS) such as the absorption of carbon dioxide (which helps to tackle pollution), regulation of local temperature (which mitigates the impacts of climate change) and provision of habitat (which helps to address the challenge of biodiversity loss) are synergistically contributing to local, regional, and global climate mitigation and adaptation.
Along with the different approaches to protecting forest ecosystems, Payment for Ecosystem Services (PES) is a popular market mechanism that promotes different types of governance arrangements between a provider and a beneficiary, intending to maintain the provision of one or various environmental services emanating from certain ecological values. According to Wunder (2005), a PES is defined as a voluntary agreement in which a well-defined environmental service is purchased by at least one user, from at least one provider of the service, with the agreement continuously supply that environmental service. The provider of the environmental service is the owner of certain natural resources or land, whose maintenance and care represent an interest for another party willing to pay for it, called beneficiaries. For such an arrangement, a consensus between the parties must exist, but also the existence of a normative framework is necessary for the legitimacy of these initiatives1.
In any PES it is crucial to identify the entity that has clear ownership rights to the ecosystem service. This entity will be responsible for selling the service, and it could be a local community group, a private owner, or a government body. Additionally, it is important to the beneficiary of the service, which could be a community, a private individual, or society as a whole. According to these possibilities, we can have three broad types of payment schemes for PES2:
Public payment schemes: the government is the beneficiary and pays land or resource managers to enhance ecosystem services on behalf of the wider society.
Private payment schemes: usually self-organized deals where both beneficiaries and providers are private entities or persons.
Public–private payment schemes: where both government and private funds are pooled to pay a private provider.
In recent times, PES has also been discussed as a useful approach to support climate change adaptation initiatives as it helps to reduce the impact on ecosystems, encourages management practices that take climate change into account, and/or indirectly enhances the adaptive capacity of the social-ecological system3,4. This is key when the natural good or ecosystem has been proven to be essential in combating climate change, such as seagrass ecosystems have the potential to sequester and store carbon5, riparian forests can reduce downstream floods6, and restoration of habitat connectivity can increase biodiversity and carbon sequestration7,8,9.
In Latin America, the use of PES as an institutional mechanism has increased since 1997 with a primary focus on conservation goals, hydrological studies, and forestry systems10. However, finding a balance between the tradeoffs of ecosystem services is a significant governance challenge due to the complexity of social-ecological systems11, lack of consideration of historical and structural local contexts12 and projected climate change scenarios impacts on ecosystem resilience13. Furthermore, many of these conservation initiatives remain as private efforts and are not necessarily inserted in the network of national adaptation and mitigation efforts. As a result, they encounter several challenges related to financial constraints, lack of governance arrangements, unclear rights and responsibilities, uncertain environmental effectiveness, and a lack of clarity regarding the opportunity costs for the service provided14,15,16.
In addition to the governance of PES, certain challenges arise due to the unpredictable response of natural ecosystems to climate change and its potential impact on the provision of ecosystem services and institutional arrangements based on stationary climate projections which are no longer accurate17,18. Consequently, conservation arrangements such as PES requires and institutional review that goes beyond legal, financial, and institutional terms14,19,20,21, but also take into account the uncertainty of climate change impacts, such as changes in the water cycle variables22. Scientific literature usually describes uncertainty as randomness, while limited importance has been given to those wrong assumptions that are impacting decisions23. In this line, governance approaches to ES must translate into institutional arrangements that incorporate the uncertainty of climate impacts into formal rules, norms, and laws, to generate better outcomes in terms of trade-offs10. Questions remain about whether and how we should incorporate climate uncertainties in future institutional arrangements to manage ecosystems.
In this study, we explore why and how to incorporate climate uncertainties in private Payment for Ecosystem Services (PES) using the Altos de Cantillana Nature Reserve in Central Chile as an example. This is a crucial and timely consideration for such ecosystems, as Chile is one of the nations that signed the 2022 COP Biodiversity Agreement, committing to the goal of protecting 30% of the planet by 2030 and it is implementing several efforts to include the link between climate change and biodiversity to achieve the Sustainable Development Goals, such as the recent National Restoration Plan24, the Climate Change Framework Law (N°21455), the Native Forest Law (N°20283), and a very recently approved bill for a new Biodiversity and Protected Areas Service (Law No. 21.600/2023). Nevertheless, there are still several unknowns regarding the effectiveness of such arrangements considering the vulnerability of its ecosystems, one of them being the Mediterranean found in central Chile (30–38°S), which is are already facing changes from higher temperature and less rainfall conditions such as tree browning25, and increased fire risk26,27. In addition, the lack of effective institutions that consider nature-people relationships holistically and strategically28 further complicates the implementation of PES as a climate change adaptation mechanism.
The Altos de Cantillana Reserve is in a region containing the only Mediterranean forests of South America29,30 and it is an important biodiversity hotspot31 with a high diversity of endemic plants. Nonetheless, human uses, climate events32 and overall climate change have negatively impacted their ecological performance at an ecosystem scale33, community scale31, and population scale34. As a result, the provision of ecosystem services in this type of vulnerable ecosystems has been affected35,36. The private Reserve is the main management strategy in the Cordón Cantillana, located in the Laguna Aculeo basin, which was the scene of a recent hydrological analysis and a process of Voluntary Basin Management Agreement36. The Altos de Cantillana Nature Reserve is therefore a key case to explore the possibility of PES arrangements, as it is a national hotspot of biodiversity, facing impacts by an unprecedented drought, and there have been experiences of institutional arrangements on other types of economic approaches (Emissions Compensation program). The described context urges us to find possibilities for PES-type conservation strategies that consider climate change as a current and future driver of institutional change. The protection of this ecosystem linked to the Reserve and the drought being faced shows the relevance of evaluating the possibilities of PES-type conservation strategies (Fig. 1).
a The hotspot is located in Central Chile, b very close to Santiago de Chile, the capital and largest city in Chile, c the area that belongs to the reserve (red line) is located in the Aculeo lake basin (blue line).
Since there are no regulations in Chile, if a PES is implemented today in the Cantillana, it will probably follow international standards and examples, many of which have had limited success. To justify the need and demonstrate the ways to incorporate climate change in a PES for the Cantillana range we need to have a comprehensive understanding of 1) how climate change may impact the institutional functioning of any PES, 2) what valued ecosystem services may be at risk from climate change and 3) how it could force institutional changes in a future PES for the Cantillana reserve. In Fig. 2 we explain the process and the connections between the 3 methodological stages presented above, and how a general analysis of the possible overall impacts of climate change on PES institutional arrangements is first needed, to later exemplify how this could be implemented in the Cantillana Reserve. To explore why and how to incorporate climate change uncertainty in a Payment for Ecosystem Services, this study presents the approach and results for (1) local stakeholders’ preferred ecosystem services in the Cantillana Reserve organized in bundles, (2) an array of climate change impacts for those bundles of ecosystem services, (3) identification of potential climate change impact in a traditional Payment for Ecosystem Services based on other South American PES cases, and (4) a proposal of institutional arrangements for the Cantillana Reserve considering the identified potential climate change impacts and the bundles of ecosystems approach. With this strategy (Fig. 2), we can explore what type of climate-sensitive institutional arrangements would be necessary to advance potential PES agreements in an uncertain future.
Source: own elaboration.
The Altos de Cantillana Reserve is a natural sanctuary located in the Altos de Cantillana mountain range in central Chile (33°57′ S, 70°57’ W), with an altitudinal gradient of 380 to 2282 (m.a.s.l.). The mountain range is a Mediterranean hotspot, unique in South America, with different types of vegetation communities, such as deciduous and sclerophyllous forests, and xerophytic formations, with a high presence of endemic plants37. In this reserve, we can find some iconic species of the Chilean Mediterranean forest, acting as a carbon sink and under a vulnerable state of conservation. Some examples are Nothofagus macrocarpa, a septentrional species of the genus on the continent, Beilschmiedia miersii, the largest tree species in the sclerophyll forest with individuals over 350 years old, and some endangered shrub and herbs species such as Abellanita bustillosii, Kageneckia angustifolia y Alstroemeria garaventae38. Concerning fauna, there are at least a total of 287 species of terrestrial vertebrates (of a total of 553 nationwide), with a high percentage of endemism in mammals, reptiles, and amphibians39, many of which are also under a national protection category such as Leopardus geoffroyi and Pristidactylus valeriae. Other endemic species of the Cantillana mountain range are Leucheria cantillanensis (plant) and Alsodes cantillanensis (amphibian), both at risk of extinction. The annual climate variability is characterized by a marked seasonality of rainfall, colder (Tmean = 11.4 °C) and rainy (PPacum = 300 mm) winters (June–July–August) versus dry (PPacum = 5 mm) and warm (Tmean = 23.4 °C) summers (December–January–February). The main characteristics of the soils are stoniness, almost zero depth, and steep slopes, that is, with high susceptibility to erosion. This type of soil can be located both on sunny slopes and on shady slopes, presenting greater depth, as well as organic matter in the case of southern exposure slopes40.
The Altos de Cantillana Nature Reserve was created in 2008 as an initiative of the Altos de Cantillana Corporation, a private organization made up of four agricultural families. Besides the owners, for the establishment of the Altos de Cantillana Corporation, various organizations and actors participated in the establishment of the Altos de Cantillana Corporation, such as the Global Environment Facility, the United Nations Development Program, the National Environment Commission, the Provincial Government of Maipo, the National Forestry Corporation, and the Agricultural Livestock Service. The Cantillana Corporation is responsible for the roles of administration, control and monitoring, environmental education, ecotourism, community outreach and development, resource management (e.g., grazing management areas), research and monitoring (in coordination with universities). In 2015, the Cordón de Cantillana was declared first priority site number one for the conservation of biodiversity in the Regional Strategy for Conservation, which included 205,000 hectares between Laguna de Aculeo, Alhué, San Pedro, and other locations. As there is no regulation for state funding of private conservation, in the case of the Altos de Cantillana Reserve, the main source of income comes from the Emissions Compensation Plans (PCE) from companies that once submitted an environmental study to the Environmental Evaluation Agency (Servicio de Evaluación Ambiental) and are obliged to compensate for suspended particulate matter by maintaining the forest that helps to capture and retain this material. A PCE is not a Payment for Ecosystem Services arrangement, but a mechanism through which atmospheric emissions are reduced or transferred between various types of sources, activities, and/or economic sectors, as long as they comply with the considerations established in article 63 of the D.S. No. 31/2016 of the Ministry of the Environment (MMA), which establishes the Atmospheric Prevention and Decontamination Plan for the Santiago Metropolitan Region (PPDA).The holders of projects, activities and/or modifications of existing projects must present and implement PCE that, once submitted to for Environmental Impact Evaluation, their Environmental Qualification Resolution (RCA) indicates that they are obliged to offset emissions, in the amounts established by it. Through these plans, free work with schools, outreach activities, research and restoration are financed. Any PES arrangement with this Reserve, will have to be a scheme with a private provider, where the beneficiary can be another private entity or the government.
The Cantillana range has been impacted by both human and climate drivers. This historically agrarian territory has been facing an unprecedented mega-drought with less than average rainfall for over 13 years, resulting in the disappearance of its main water body, a 12Km2 lake37. The situation left the population facing livelihood difficulties and conflicts41. In addition, forest resilience has been reduced by human impact, with activities such as deforestation, grazing, and leaf earth extraction. Some of these uses are linked to traditional ways of life in Central Chile, based on subsistence economic practices such as transhumance muleteers (“arrieros”) and peasant family agriculture (“family farmers”)42,43. Others were more common in the past, but not linked to the current subsistence practices of the local population, but rather derived from market demands and opportunities. This is the case for the provision of firewood for mining activity (XIX century) and the collection of leaf soil (second half of the XX century to date). Currently, hunting has lost its relevance due to regulation and because there is no longer a need for subsistence in the face of a greater supply of food in the area. On the other hand, the collection of firewood, herbs, and wild fruits has also been losing importance due to a lack of access to the forest by the local population. Grazing is the most current traditional activity today, due to the economic and cultural importance that livestock continues to have for peasant families and muleteers. Agricultural land use, especially traditional farming, has also been impacted by drought and water consumption44. In the last decade, there has been an increasing interest in tourism (e.g., hiking, camping, etc.), educational activities (e.g., school workshops, communal science fairs), and also, scientific activities related to the importance and vulnerability of the Mediterranean ecosystems45.
The 24 interviewed stakeholders assessed 29 services, including 13 cultural services, and suggested 8 new ecosystem services that were included (with an asterisk in Table 1). Importance ranking resulting from the tally of importance and vulnerability, shows that biodiversity, water provision, clean air, and forage provision as the most important ES.
The highly prioritized ES were evaluated in terms of its interconnections between variables, as well as their potential to be incorporated in the hydrological modeling (see step 2 in Fig. 2). This analysis resulted in a coupled climate-hydrological-ES model associated with 3 ES bundles that can be linked with three water-based variables: evapotranspiration, runoff, and infiltration. As there are always complex connections and trade-offs in social-ecological systems, we do not attempt to demonstrate how all these ES in different bundles are connected, but to describe how the main ecological characteristics and their differential vulnerability to climate change, interact with water processes:
Bundle 1- ES affected by evapotranspiration: The first impact of climate change is the increase in temperature which has a direct influence on Evapotranspiration. The recent combination of less precipitation and higher temperatures is favoring dry hydrological conditions (reduction of soil moisture), which reduced trees in deciduous46 and sclerophyllous moist forest34. The decrease in radial growth affected the biomass production in the Cantillana Reserve47. At the landscape level, an effect on the vigor of the vegetation, called browning, has also been observed, both in natural ecosystems33 and agricultural ecosystems48. Consequently, there is a negative impact on the ecosystem services provided by healthy woody vegetation, such as carbon sequestration. Unhealthy forests lose leaves (Leaf Area Index), which affects their ability to intercept water that is key for water provision and temperature regulation49,50. At the same time, when woody vegetation is affected, its greenness is impacted, and with it, the landscape changes, an aspect related to the ES of beauty of landscape. Therefore, in this bundle we grouped clear air and carbon dioxide sequestration, water provision, temperature regulation and landscape beauty. However, the less resilience of woody vegetation does not necessarily impact other ES, such as the different recreational activities that are also valued in the site and may support for longer time climate impacts.
Bundle 2- ES affected by runoff: A secondary effect of climate change on precipitation and temperature in this drylands ecosystem is a change in water runoff. Browning and declining forest phenomena affecting the Leaf Area Index impacts directly affect rainfall interception, while with less rainfall, runoff also decreases. Average runoff rates are important for biodiversity in general (e.g., plants, fungi, insects, endemic reptiles, etc.). Some culturally important ES are the native herbs and shrubs for grazing, and the traditions related to cattle muleteers in the high mountains. Impact on biodiversity is associated with loss in structure and diversity of vegetation endangering the ecological stability of the ecosystem. In the reserve the vegetation communities have different intra and interspecific relationship like providing food for exotic and native primary consumers (e.g., Oryctolagus cuniculus and Octodon degus) that are essential for native predators (e.g., Lycalopex griseus and Leopardus guigna), and floral performance for pollinators (e.g., Mutisia decurrens and Trevoa trinervis), in addition of its uses for natural medicine (e.g., Peumus boldo and Otholobium glandulosum usually used for stomach pain relief). Biodiversity is also associated with the importance of the site for scientific research and educational activities. Therefore, in this group we include Biodiversity and ESS that are connected such as food provision, medicine provision, forage provision, and educational value.
Bundle 3- ES affected by Infiltration: Less overall vegetation cover has an impact in not only on runoff but also on water infiltration to the aquifer. If runoff service is completely altered, disaster control after heavy rainfalls will be impacted. Changes in infiltration will affect soil moisture, inducing changes in soil microbiology and organic matter, altering its multifunctionality to medium-long term (e.g., carbon dioxide uptake, nutritional content to plants, and preventing soil erosion)51,52,53. Moreover, the potential environmental risk of a flood can impede outdoor activities, such as recreation and visits to spiritual centers, which are crucial to maintaining a the sense of belonging in the communities (Fig. 3).
Color depicts different types of ES (blue= provision, green = regulation, pink =cultural) and size represents the importance given by stakeholders. (Source: own elaboration).
According to the model from Barria et al., 2021 and adjustments in Barria et al.54, although climate change projections suggest increases in temperature in the basin, decreased water availability will also drive the reductions in actual evapotranspiration of 12.2 to 20.2% under the SSP45 and the SSP85 scenarios respectively, for the 2050-2080 period. These changes are particularly relevant, as the Aculeo basin is predominantly covered by native forest and shrubland, which modulate the natural hydrological cycle, but are also related to the forest health, clean air, temperature relief, and landscape services. Moreover, it is also expected that runoff will suffer large impacts due to climate change. According to the modeled water balance, the projections suggest decreases of about 27.3% to 42.8% by 2050-2080 compared to the 1980-2010 period, considering the moderate and pessimistic scenarios (SSP245 and SSP85) respectively. These scenarios were selected as they allow for the analysis of projection outcomes within a plausible range of greenhouse gas emissions, in response to the commitments made by countries in climate change framework conventions. The SSP45 scenario represents a middle-of-the-road pathway, based on the potential outcomes of the recently enacted Climate Change Framework Law in Chile, and the SSP85 represents a high-end forcing pathway, which provides a more conservative scenario.
Finally, according to Table 2, the climate change projections for the Aculeo basin indicate reductions of around 20.9% to 36.9% in infiltration for the 2050-2080 period compared to the 1980-2010 period. This is particularly relevant, as infiltration is directly related to groundwater availability in the basin, a water source that is supporting most ecosystems after a decade of drought.
According to the coupled climate-hydrological results (Table 2), there are different levels of risk to ES that are connected to these water-related variables. Although Table 2 shows that runoff will be the variable with the higher impact, bundle 2 of ES has a longer time possibility of being affected by climate change as its process has a more delayed response than evapotranspiration. Bundle 3 has a lesser risk of being affected in the short term by climate change, as it will require an important impact on vegetation and increase in the frequency of intense rainfalls, storms that will be less common than droughts in Central Chile. Therefore, the ES involved in bundle 3 could theoretically be enjoyed for a longer time in this site in a climate change future scenario and include risk control, and cultural ES such as local recreation, rural tourism, scientific interest, spiritual importance, and sense of belonging or identity. However, as this modeling results shows, in an SSPP85, half runoff decrease will impact current aquifer sources that are supporting ecosystems.
On the identification of climate change’s potential impact in a traditional Payment for Ecosystem Services (see section 2 in Fig. 2), information on the 10 PES cases in South America allowed to identify the following types of recommendations related to current PES challenges:
Challenges prior to the PES: These recommendations are related to having a clear understanding of the land tenure status, the existence of trust (or the opposite, conflict) between the parties, and the early involvement of public authorities. According to Cunha (2016)55, it has been found that participants have more confidence in the process when public authorities are the ones that establish rules and formalize agreements within legal frameworks.
Recommendations for the PES design: these barriers can be translated into recommendations related to the clarity/simplicity of the arrangement scheme, contemplating sanctions against non-compliance, incorporation of administration and monitoring costs, consideration of efficient follow-up and monitoring methods, and selection of the appropriate scale. For the cases reviewed, usually local or regional was the recommended scale. According to Grima et al. 56, local and regional scales allow the communities to better identify with the actors and intermediaries and for the joint monitoring of costs and benefits.
Recommendations for the choice of the selected ecosystem service: besides the institutional scheme that is defined, the selection of the ecosystem service is key, as it is necessary to ensure a flow of supply and quality of the service. This means that the ES must be linked to an area providers can manage and/or protect, otherwise differences in interests and high opportunity costs of using the ecosystem may difficult its protection. Having a baseline study of the ecosystem service is also important while selecting an ES as it is related to having the possibility of having a clear connection between the provider management and the service. Precisely, this link allows not only to verity the effectiveness of the PES scheme, but also allows buyers to be reassured that they are paying for changes in the use of land that is connected to an increase in quantity and quality of the service they were paying for57.
Recommendations for providers: from the provider point of view, a clear, variable, and attractive opportunity cost, as well as the consideration of practices that they will be able to adopt is key for a successful PES. This is paramount in areas where there are several owners that must comply with new norms of use of the land, which most likely includes avoiding the extraction of resources. Cisneros et al.58 point out that it is more useful to have an idea of the opportunity costs associated with the land management uses, than a total economic valuation of the service itself since the former can represent important barriers to participation if extraction of the resource is more profitable than conserving it for beneficiaries (e.g., if extracting wood has a greater economic value than conserving the forest for landscape beauty enjoyment).
Recommendations for beneficiaries: the literature review emphasized essential for trust in a PES scheme, the importance of having representative organizations of both beneficiaries and providers, as well as providing beneficiaries with access to optimal information about the services they are paying4,56.
From these recommendations, we found that some of the guidelines for the PES design (b) and chosen ecosystem service (c), were important considering current uncertainty with climate change (Table 3).
Results from previous sections show that (1) ES are interlinked and can form bundles, (2) there are bundles of ES with more risk associated with climate change than others, (3) there are inevitable future impacts from climate change that are out of the service providers control, and (4) current PES institutional arrangements approach based on static flows of services, do not consider climate change new context. From the PES recommendations extracted from study cases (Table 3), we identify 6 new institutional arrangements for private PES regarding climate change:
Make the climate risks transparent in the arrangement: include a step of beneficiaries and providers discussing and making transparent climate-related uncertainties with the ES that is part of the potential arrangement. If doing so entails complexities and excessive costs (e.g., if there is no scientific information nor technical capabilities to implement a study), compliance agreements will have to withstand higher levels of risk.
Careful selection of the site: related with the previous, area selection becomes key, as some areas will be more susceptible to suffering from climate change impacts. Even though a negative impact on tree growth is observed along the elevation gradient of Altos de Cantillana47, there are ecosystems with greater tree diversity (sclerophyllous moist forest), or with lower regeneration rates (ecotone shrub-trees forest) that could have priority for climate-sensitive institutional arrangements.
Assure active management: Including compliance agreements has have to be based on a combination of flow and active actions to ensure agreed levels of flow (see recommendation F below) despite climate risks. In other words, no agreements should be based on passively waiting for the ES to be provided. Therefore, different levels of risk associated with each ES will require diverse management approaches, including restoration, rehabilitation of ecosystem services, etc. This is an important consideration as there are impacts not related to climate change that are necessary to better understand and address in a healthy ecosystem as compared to an ecosystem that is currently under stress. In relation, further studies are necessary to better understand how perversity coming from attributing climate change in PES agreements will happen in the future, similarly to when a high forestation rate is the result of previous deforestation of native forests59,60.
Include flexible costs: as mentioned before, management costs will require inclusion of larger active actions on the provider side, as not using the resource will no longer ensure the ES flow. This is also related to recommendation D for monitoring, as new PES agreements will require costly monitoring to assure providers are complying with agreements. This will require consideration of new funding sources, as monitoring has always been a complex barrier in PES14.
Incorporate attribution analysis in monitoring: monitoring will have to include climate change attribution studies, as otherwise sanctioning an ES flow reduction without understanding the differentiated sources of risk may result in incorrect understanding of SES complexities. This implies different monitoring devices and technical capabilities to better discern management from climate changes. This is an important consideration as failure to provide a service could be perceived as violation of the relationship14. Similar recommendations for new large-scale approaches for monitoring of the biological elements in the ocean have been made to assure carbon capture and fixation, as the identification of appropriate areas for this ES is difficult, and connections with climate change is complex and poorly understood61.
Identify possible ranges of flows under different scenarios: Include ranges of ES flows in PES contracts, as static flows will be very difficult to maintain by a provider. In this regard, fuzzy rather than crisp thresholds of compliance will better adjust to the new reality. Identifying bundles with different levels of risks is also part of this alternative. As exemplified here, ES bundles could support decisions in contexts of uncertain understanding of the climate-ES flow connection. Participatory selection of these ranges may also represent an important aspect of recommendation A.
Given the three levels of vulnerability associated with each bundle identified in the Altos de Cantillana reserve, in Table 4 we exemplify how these institutional arrangements recommendations for PES could be associated with the level of risk for each bundle. In summary, there are costly actions related to measuring and studying climate change (recommendations C, D, and E) that, in some cases, will have to be part of the Provider actions, and therefore these need to be an important initial consideration before getting into any negotiation with a beneficiary.
This study conveys that in a more complex future, Payment for Environmental Services institutional agreements must be flexible enough to adapt to changing conditions, which in many cases will include climate impacts on the flow of ecosystem services on which agreements are based upon. As we exemplify in this study, there is potential in establishing gradual institutional strategies based on different climate scenarios over ecosystem services prioritized by stakeholders and organized in bundles linked to hydrological variables that will be affected by those climate change scenarios. Once ES bundle levels or risk are identified, it is possible to have a better understanding of the levels of risk associated with the flow of ES under a PES agreement. Based on this analysis we propose six recommendations for institutional arrangements that incorporate a climate uncertain future in some of the most climate-based challenges in PES: (1) make the climate risk transparent in the agreement, (2) ensure careful selection of the site, (3) secure active management, (4) include flexible costs, (5) incorporate attribution analysis in monitoring, and (6) identify possible ranges of flows associated to bundles of ES under different climate scenarios. PES institutional recommendations in this study can then be incorporated in agreements over the Cantillana Reserve and according to the different levels of climate change associated risk identified. However, some aspects that require further discussion:
The six institutional design elements are related to critical considerations for the provider (i.e., careful understanding of climate impacts in the ES to be selected, appropriate selection of the ES and management site, active management of the ES and consideration of potentially higher maintenance costs), but also risk considerations from the beneficiary point of view (i.e., ES flow analysis and understanding of attribution analysis for climate change impacts). However, as these PES cases were not studied from a climate change specific focus, other challenges in future PES contract arrangements may not have been captured in the articles (e.g., types of payments, frequency of payments, etc.). Although a larger systematic review of the literature could have identified some additional critical aspects not considered in this analysis, explicit linkages of challenges related to climate change impacts in the flow of service and payment schemes are not that common. As mentioned by Van de Sand (2012) PES can contribute to adaptation to climate change, but at the same time it poses risks to adaptation if structural conditions are not considered (e.g., land tenure). Therefore, more research that explores the linkages between climate and non-climate drivers in ecosystem services future provision, will help to draft better conservation approaches, such as Payment for Ecosystem Services62,63.
On the stakeholders’ ES priorities elicited with the questionnaire, results show that they are conscious of the benefits received from the Cantillana Mountain range. Recognition of vulnerability along with importance, results in prioritizing ES that are usually considered in PES: biodiversity, water provision, and CO2 sequestration. Interestingly, water provision was mentioned as an important service, but not linked with water quality. Given the usually good quality of water that comes from the high Andes, it is probably not a distinction that stakeholders usually make in this basin. Another important result was that four of the newly suggested services were prioritized (risk reduction, rural tourism, health, and scientific interest), and four others, as for example, geologic importance, were not prioritized even by the same stakeholders that suggested them in the first place.
Although climate change is primarily a water crisis that has impacted all aspects of the hydrological cycle64, it may not necessarily be the main link to ecosystem services in other contexts. In the Cantillana, water-related processes can be modeled and linked to ecosystem services, but different approaches may prove more useful in other PES arrangements. For example, studies in the United States have noticed climate change impacts in behavior, morphology and phenology of species that will affect ecosystem services flow65, variables that could not be captured in a distributed hydrological model as the one used in this study. Furthermore, climate-hydrology connections to ES may not necessarily be a useful methodological approach during provider-beneficiary discussions, if social conflicts undermine the credibility of the hydrological model’s outputs66.
Regarding the ES bundles approach followed, this study shows that the more an ecosystem is studied, the better ecological interconnections are understood, which ensures the definition of policies that best respond to social and ecological local realities. This is an important consideration for private conservation that requires to focus conservation efforts on elements that are relevant for local actors but also, more vulnerable to natural and human impacts. As it was shown in the challenges of private conservation efforts in South America, agreements based on ecosystem services that will eventually disappear regardless of sustainable management, could result in conflict and loss of confidence in the institutional agreements. Similarly, these institutional arrangements, are based on the current scientific knowledge of the Cantillana ecosystem and its hydrology. However, there is a monitoring gap in Chile, which limits the characterization of ecosystems dynamics in relation to climate and water variability67. More knowledge in the functioning of these ecosystems may result in rearrangement of the bundles configuration (e.g., biodiversity more directly impacted with infiltration that with rainfall).
On the governance design, there were recommendations identified in the literature review that were not considered under risk in a climate change scenario, for example the importance of having an early involvement of public authorities, even though the scheme could be between privates, as it may result in more confidence in the legality of the agreement56, and the assurance of the payments between beneficiary and provider1. Although this recommendation was not considered under risk in a climate change scenario, this study does bring the need to discuss the capacity of either private or public providers/beneficiaries, to comply with the increasing costs that a flexible PES arrangement under climate change uncertainty will demand. As presented in Table 4, many of the new arrangements will require an increased operation budget for selecting the appropriate area (recommendation B), active management (recommendation C), flexible monitoring costs (recommendation D), and attribution analysis (recommendation E). Even if the financial requirements are met by the beneficiary, as explained earlier, there are ES that are already showing high vulnerability to climate change48, therefore, it will be very difficult to ensure continuous supply and quality of the ES under current rainfall and temperature conditions. This factor is crucial as the hydrological projections do not include human water extractions (e.g., irrigation and consumption) that will further exacerbate impacts on infiltration and may cause more risk in associated ES.
Identifying what local stakeholders value is the first step into exploring their potential willingness to pay its protection. However, if these ES are under high risk of disappearing under expected future climate change, the disruption in the flow of a service that is under a rigid legal contract between providers and beneficiaries, may result in distrust between participants, disruption of payments and increase degradation of the ES that was aiming to be protected68. That’s why local prioritization of ecosystem services must be followed by climate impact analysis, not only to show the vulnerability of ecologically relevant ecosystem services, but also to quantify the connection with important cultural ecosystem services (e.g., religious sites) that are usually not considered in climate change impact analysis, even though are key to engage local stakeholders in the protection of natural ecosystems69. In this regard, the methodological approach followed in the Cantillana Reserve was useful for quantifying the risk of ES bundles dependent on the water cycle and connecting them with climate change impact, while using existing hydrological models that are going to be the decision-making tools for water planning and climate adaptation actions (Climate Change Framework Law 21.455). This is an important line of research as climate change and ecosystem services studies usually demonstrate flow implications, but do not necessarily translate them in the contract itself. Future work will be to evaluate how a PES governance scheme based on bundles and flexible contract rules could be received by potential beneficiaries.
PES usually reflects local stakeholders’ ESS priorities, therefore eliciting local perception is an important phase to ground policies into local context70. In this study, to identify the ecosystem goods and services that could be part of a potential long-term PES arrangement with the reserve, a preliminary list of ecosystem services was identified from studies in the Aculeo basin45. Following, a mixed qualitative-quantitative questionnaire was applied to key stakeholders, to capture the opinion (qualitative information) and obtain a ranking of preferred ecosystem goods and services (quantitative information) in the Aculeo basin. The questionnaire applied to elect the preferred ecosystem goods and services consisted of 5 sections: (A) Identification of the interviewee (personal data), (B) Personal connection and knowledge of the Cordón Cantillana and selection of the 5 most important goods and services of the Cantillana range, (C) Prioritization of benefit and vulnerability by ranking in a scale from 1 (minimum benefit/vulnerability) to 5 (biggest benefit/vulnerability), (D) Suppliers and beneficiaries of goods and services: exploration of synergies and obstacles between actors to promote payment schemes around ecosystem services (qualitative section). Before starting each interview, the Informed Consent was read and signed to clarify the project objectives and guarantee the protection of the confidentiality of the interviewee’s personal information. During June–August 2021, 24 interviews were conducted (1–2 h of duration), 16 were face-to-face, following a prior consent process and complying with all health protocols (social distance, outdoors, mask, use of alcohol gel); and 8 via telematics, through the zoom application.
The selection of the key actors was based on three criteria: representatives of organizations and socio-productive institutions of the territory, geographic location, and gender inclusivity (e.g., aiming at balancing opinions from male and female key stakeholders in the basin). This way, we aspired to obtain a representative image of the social diversity of the basin (Table 5). Additionally, new key actors were incorporated through the “snowball sampling” methodology71. Table 5 presents the categories of local actors interviewed.
With the interviews completed, ecosystem services were tallied by the importance and the vulnerability ranking given by the stakeholders (1–5 points given in section C), i.e., the higher the importance and vulnerability of the ecosystem service, the higher its priority.
To connect consistently interrelated and reoccurring ecosystem services and enhance policy synergy, authors have proposed the ecosystem bundles approach72,73. A systematic review of 117 scientific articles by Said and Spray72 described two ways in which ES bundles have been identified and assessed: i) bundles of consistently associated ecosystem services (related with an existent association in space and time), and ii) co-occurrence of ESS given the multifunctionality of ecosystems, i.e., sets of ES provided by a specific location or ecosystem. Identifying ES bundles to support decision-makers in a future driven by climate change requires recognizing interconnections and potential impacts from changes in the frequency and intensity of main climate drivers (i.e., increasing of solar radiation and temperature, reduction of total precipitation amount, and shift of air and soil humidity and precipitation frequency, etc.). This is especially important as multiple interrelated functions do not necessarily mean they form a bundle, as there may be trade-offs between them or respond to different drivers and interests72. Therefore, in this study, our approach to link climate change to ES bundles was through the locally identified impacts of climate in the main features of the water cycle, and in the flow of dependent key ES previously prioritized by local stakeholders. Other studies have linked water supply association with regulating services such as soil retention74, carbon storage75, or biodiversity76. Relations between individual ES were described from literature to identify synergistic impacts, i.e., if one is affected, there is a high probability that the other services will also be impacted.
As explained before, there is no standard approach for bundling ecosystem services, as it requires a reflection on the purpose and the strategy necessary72. Quantifying the impact of future climate change on the provision of cultural ecosystem services will require understanding its physical connection to a variable that can be modeled, otherwise, the decrease of cultural ecosystem services valued today will not be captured in PES arrangements. Because of the existent hydrological model36 in the Cantillana case, water-related processes can both be modeled and connected to the ecosystem services that were mentioned and prioritized by the local community. Consequently, in this investigation, bundles reflected groups of ecosystem services with different vulnerabilities to climate change scenarios as a result of their connection with a change in temperature and/or precipitation expressed in the three mentioned variables: evapotranspiration, runoff, and infiltration.
Following those guidelines, a hydrological model forced with two climate change scenarios considering a moderate and a heavily loaded greenhouse gas emissions (SSP245 and SSP585) of the CMIP6 experiments77 were analyzed to project possible impacts in the hydrology of this basin in terms of rainfall and evapotranspiration changes. This modeling was based on a published model54 with increased details in crop coefficients (Kc) representing different groups of vegetation in the Cantillana Reserve47. For this investigation an ensemble of 37 runs from 15 Global Circulation Models under the SSP2-4.5 (global radiative forcing of 4.5 W m−2 by 2100, middle-of-the-road pathway) and SSP5-8.5 (8.5 W m − 2 forcing, high-end forcing pathway) were used to force the water balance model constructed using the WEAP software78. Models and runs that were available for both SSP scenarios and for the entire analyzed period were selected (Supplementary Information 1). The WEAP software has previously been used to assess ES, especially oriented to those linked to water resources79. For example, Flores-Lopez (2016) studied the ecosystem services of the paramo in the Quiroz-Chipillico basin in Peru using the WEAP model, fed by different management scenarios80. Similarly, Momblanch et al.81 assessed water-related ecosystem services in a basin in India, finding that current and future states of freshwater ecosystem services were dependent on the spatial patterns of climate change and the impacts of infrastructure management on river flows81.
The Coupled climate-hydrological-ES model was then used to explore levels of potential decrease (or climate risk) for each bundle according to its connection with a hydrological variable. In this study, the WEAP model was used to project changes in evapotranspiration, runoff, and infiltration. These three variables were selected for being 1) possible to model under different potential climate change scenarios, and 2) are under scientific scrutiny to better understand its connections with forest growth in similar ecosystems in Central Chile82,83,84,85. Hence, a higher projected decrease in one of the variables will mean a higher climate risk in the associated ES bundles.
As there are no standardized regulations for private PES schemes in Chile, given the similarity to the Chilean context (i.e., presence of indigenous populations, history of colonialism, rural poverty, etc.) information on successful PES configurations was drawn from other case studies in South America. Once potentially interesting PES cases were drawn from review-type published articles21,86 and reports87, a second search was conducted to find detailed information on success/failure elements, or barriers of social, economic and legal nature for some of the more similar and interesting cases58,88,89. The analysis was able to find sufficient information in 19 peer-reviewed articles, 18 reviews, and 10 documents that referred to 10 PES study cases in 9 different countries, allowing us to observe a diversity of situations. From the specific cases, it was possible to extract information on PES difficulties, along with information and individualization of sellers, buyers of the service, the ecosystem service that is provided, the type of payment, financing, design, and effectiveness90.
From that first list of current barriers for PSA in private areas in South America, we identified direct and indirect aspects that may be at larger risk with current and future climate change uncertainty (see Table 3). These are general recommendations based on similar cases (i.e., forests under some type of management in South America), and general recommendations from review-type of articles, therefore not necessarily applicable for other type of PES arrangements that could include different contract clauses. It was not possible to obtain more details on the post-implementation follow-up nor to identify which of the cases are still working today or which have been successful. It should be noted that the findings of these studies cannot be used to establish a relationship between climate change and Payment for Ecosystem Services (PES) in Chile. However, they may offer insights into the potential incorporation of a new climate change-based institutional arrangement based on climate change within a specific aspect of a PES contract.
As climate change will impact ecosystem services in uncertain and sometimes unquantifiable ways, we exemplify how it could be possible to consider the risk of climate change by matching ES bundles identified in the Cantillana Reserve with the main PES arrangements recommendations. In this manner, although the impact of climate change on a cultural ecosystem service (e.g., spiritual importance) cannot be accurately measured, if this is part of a bundle associated with a hydrological variable that are at risk of decreasing (as shown in Table 2), it means that a stricter PES arrangement should be put in place, which includes restricted uses, more monitoring, more greater management flexibility, compared to an ecosystem service that is at less risk (as discussed in section 2.2.). As a result, we demonstrate why PES arrangements need to consider differentiated impacts of climate change and how this translates to recognizing associations of ES in bundles (Table 4).
Further information on research design is available in the Nature Research Reporting Summary linked to this article.
Non-sensitive data regarding hydrological modeling or ecosystem monitoring can be requested from the corresponding author.
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The authors express gratitude to the Bosque Nativo 22/2020 funds from the Corporación Nacional Forestal that supported this research. We also thank the support of the Fondecyt Iniciación N°11200027; N°11200854 and Fondecyt Regular N°1221701 for their support during fieldwork. And more importantly, the support of the Altos de Cantillana Reserve and the Paine and Aculeo stakeholders for participating in the interviews.
Facultad de Ciencias Forestales y Conservación de la Naturaleza, Universidad de Chile, Santiago, Chile
Anahí Ocampo-Melgar, Pilar Barría, Claudia Cerda, Raúl Díaz-Vasconcellos & Javier Zamora
Instituto de Ciencias Agroalimentarias, Animales y Ambientales (ICA3) – Universidad de O’Higgins, Santiago, Chile
Alejandro Venegas-González
Departamento de Geografía, Universitat Autónoma de Barcelona, Barcelona, España
Javiera Fernández
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Correspondence to Anahí Ocampo-Melgar.
The authors declare no competing interests.
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Ocampo-Melgar, A., Barría, P., Cerda, C. et al. Payment for Ecosystem Services: institutional arrangements for a changing climate in the Chilean Mediterranean Region. npj Clim. Action 3, 52 (2024). https://doi.org/10.1038/s44168-024-00132-2
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DOI: https://doi.org/10.1038/s44168-024-00132-2
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