Mainstreaming Market-based Instruments for Environmental Management Project

The objective of the proposed project is to secure the long-term sustainability of the Payment for Environmental Services (PSA) program for sustainable natural resource management and biodiversity conservation. The objective will be achieved through the following initiatives;1) developing and using new financing sources, including new water tariff and carbon emission reductions sales;2) strengthening the Biodiversity Trust Fund established by FONAFIFO to provide for the long term financing of biodiversity conservation and sustainable natural resource management in areas where these funding sources might not be sufficient;3) increasing the program's efficiency by differentiating payments according to the level of environmental services provided;4) establishing a system with consistent monitoring of environmental, social and economic impacts of the program; and5) increasing the PSA Program's contribution to poverty reduction in rural areas.Jan 18 2006:The global environmental objective of the project is to enhance the conservation of globally significant biodiversity and ensure its long-term sustainability by mainstreaming market-based instruments in productive landscapes in the bufferzones of protected areas and the corridors connecting them. The project will develop new financing mechanisms with targeted approaches based on the characteristics of demand for specific services, e.g. hydrological, biodiversity and carbon. The project will have the following four components:1) Developing and implementing sustainable financing mechanism2) Scaling up the environmental services program3) Deepening the PSA program's contribution to rural poverty reduction