From Principles to Numbers: Approaches in Implementing Payments for Environmental Services (PES) in the Philippines - Smallholder Tree Growing for Rural Development and Environmental Services - page 374

It is possible for ES projects to advance from a lower tier to a higher tier as con-
fidence increases and funding becomes available. It should also be noted that the
tiers are not discrete groups. In other words, some middle-of-the-ground methods
are possible. The tier system is simply a way to systematizing the various methods
of valuing an environmental service.

17.3.2 Price of ES and the Tier System

The tier used could help set the price of an environmental service. The higher the
tier level used the higher the price for the same environmental service. For instance,
someone willing to pay for forest protection to conserve carbon will pay a higher
price if the carbon stocks conserved are quantified (Tier 3) compared to if they are
simply assumed to be some amount based on global default values (Tier 1). Thus,
the tier system can also be used as a guide to compare the quality of the ES being
offered for “sale”.

17.4 Concluding Remarks

Interest in PES is bound to increase as environmental problems escalate in many
parts of the world. The tier approach we propose here could provide a way of facili-
tating the entry of more players in the PES through a graduated and learning-by-
doing approach, especially in developing countries like the Philippines.

Acknowledgements The authors would like to thank Ms. Cecily Hindley for editing this paper.

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