Participation in Payment for Ecosystem Services (PES) and its Effects on Household Welfare in Mt Elgon, Kenya

Abstract

Forests offer vital economic, social, ecological and cultural benefits yet they continue to be degraded at a higher rate than other natural ecosystems. To reverse this trend, payment for ecosystem services (PES) programs have been promoted with the aim of delivering both sustainable forest use and livelihood improvement to forest communities. Despite the rise in implementation of PES programs, the understanding on its effects on livelihood outcomes is limited, in part because the existing evidence is skewed towards conservation outcomes. This is despite evidence showing that improved forest governance and ecological restoration is dependent on livelihood gains which can only be attained through local communities’ participation. Therefore, this study assessed household participation in a payment for ecosystem services and its effect on households’ welfare in Mt Elgon, Kenya using a case of the Plantation Establishment Livelihood Improvement Scheme (PELIS). PELIS seeks to enhance community participation in restoration of forest ecosystems through establishment of plantation forests with a dual aim of improving forest cover and local people’s livelihoods. The study employed a stratified sampling design to identify three forest stations (Saboti, Kimothon and Kaberwa). Further a random sampling technique was used to obtain a sample of 919 forest dependent households. Pretested survey questionnaires were administered to the 919 households and prior to that, FGDs and KIIs were conducted to corroborate survey findings. A participation index computed from nine key forest activities was used to assess household participation levels. Heck-Poisson model was used to assess determinants of participation and its intensity. Propensity score matching was applied to assess the effect of PES on household food security and income levels. Results from the study reveal that 49 percent of the households participated in the PELIS program. The mean participation index was 5.3 out of a maximum score of 9 indicating an above average participation level. Low participation was observed among poorer households and female headed households. The heck-Poisson results indicate that gender of household head, forest extraction, livestock ownership, ownership of private woodlots, income from PELIS, perception of forest cover change and involvement in forest user group meetings positively influenced the levels and intensity of participation. Age of household head, membership to middle and poorest wealth categories and off-farm income negatively influenced the levels and intensity of participation. Propensity score matching results show that households’ participation in PELIS lowered the food insecurity experience score (FIES) score by 0.437. This finding indicated that participation in PELIS positively influenced households’ access to food. The results further showed that participation in PELIS positively affected household income; with income from PELIS contributing 40 percent of total income. Assessment of distributional effects revealed that the PELIS program significantly impacted households in the poorest quantiles (1-4) but had no significant effect on upper quantiles (5-9) implying that the program has the potential to reduce poverty. However, in order for the program to make greater contributions in poverty reduction and forest conservation, the study recommends; a) Cost reduction mechanisms to increase participation among women and the poor. These would include waivers on enrolment and registration fees for poor households, in-kind payment such as labour for various forest activities or provision of subsidies for production inputs. Besides, limited access to physical and financial capital influenced participation in PELIS among the marginalized (poor households and women) in the society. This calls for greater attention to the pro-poor design of PES programs implemented on forest ecosystems to ensure inclusion of eligible and willing households. b) Participation in PELIS contributes positively to outcomes on household food security and incomes. These positive outcomes can inform roll-out of similar programs in other ecosystems offering potential for overall rural development.