Promoting Investments in Ecosystem Services: the Case of the Peruvian Amazon

Natural capital and the Ecosystem Services (ES) that flow from it are essential to civilization as they provide both the conditions and the processes that sustain human life. Peru possesses the third largest tropical forest cover in the world and is undoubtedly one of the planet’s mega-diverse countries. This document focuses on exploring the viability of markets for ES as a tool for funding conservation in the Peruvian Amazon given the current highly charged climate surrounding natural resource management policies that the government must deal with. Qualitative research methods were used to analyze interviews conducted with high level government officials, NGO directors and bilateral agency program managers in Peru to gain insights into the gaps in existing natural resource management policies that create risks for developing markets for ES. Issues such as institutional capacity, multi-stakeholder decision making, land-use planning, definition and enforcement of property rights, consultation and free, prior and informed consent from local communities for major investment projects as well as the strictness and enforcement of regulations around Environmental Impact Assessments stand out as key shortcomings in Peru’s natural resources management policies that create risks for the development of ES markets. Most of the key issues identified in this investigation are not specific to ES markets; rather they are general issues that must be considered for good practices in natural resource management. As such, creating ecosystem service markets will do little if anything to improve the long-term sustainability of Peru’s natural capital and the ecosystem services that flow from it if these issues are not addressed as part of an integrated natural resource management strategy.