Payments For Ecosystem Services (PES)
GIST Advisory provides innovative solutions for the conservation of natural resources. One of our key areas of expertise is designing Payments for Ecosystem Services projects. Payments for Ecosystem Services (PES) is an incentive-based approach aimed to protect ecosystem services, through providing compensation to land owners or managers (including governments) for adopting practices favourable to the ecosystem and local stakeholders. If the users of the ecosystem services can compensate the providers, conservation may be more attractive to the providers, thus inducing them to conserve or shift to less environment-damaging activities and practices. PES projects are designed to ensure equitable benefits for stakeholders and positive impacts on the ecosystem services.
Our projects involve payment schemes that are outlined on realistic local contexts. This enables implementation within existing legal, public and private sectors, policy and fiscal structures - making them sustainable in the long-term. PES can focus on a variety of services like water flows, carbon sequestration and storage, biodiversity protection, landscape beauty, salinity control, soil erosion prevention and so on. The markets for landscape services encompass variety of services like conservation of wildlife and protection of landscape beauty. The beneficiaries can be local, regional and global in nature.  
Payments for Ecosystem Services” Feasibility Study for Lake Sevan, Armenia 

GIST Advisory, in collaboration with the United Nations Environment Programme, conducted a study to assess the feasibility for a PES scheme for the water purification and waste treatment services of Lake Sevan in Armenia. As a part of the study, the value of Lake Sevan to the local, global and regional community was assessed by identifying the main ecological and environmental services, thereby establishing a link between land use change practices with restoration of Lake Sevan. This paved the way towards identifying the most appropriate payment schemes, which can provide incentives to landholders to maintain or generate the services identified.

Following were the key ecological and environmental services of Lake Sevan as identified by the study.

Economic Categories of Benefits Provided by Lake Sevan

The study revealed that in Lake Sevan, around half the respondents were willing to pay a positive monthly sum to maintain the water levels in the lake. The average sum offered under this willingness-to-pay methodology was 201 Armenian Dram per month, for the next three years. Assuming half of Armenia’s households would indeed be willing to pay such a sum over the course of three years, the value of maintaining Lake Sevan could be estimated at US $4.6 million (based on 2003 average exchange rates).The study proved that there was a clear linkage between water quality of Lake Sevan and the ongoing economic activities in the areas surrounding the lake. Over the course of only 20 years, the level of the lake had dropped by 18 m; its surface area decreased from 1,416 to 1,239 km2; and the volume of water in Lake Sevan had fallen by more than 40%.

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