Incentives, Ecosystem and Communities: A Possible Incentive Mechanism for Mid Hills of Nepal

Payment for Ecosystem Service (PES) is one of the instruments increasingly used and recognized as a tool to sustaining ecosystem services flow while contributing to local livelihoods of the resource dependent communities. It is described as a free market-based approach to conservation where ecosystem service consumer pays to the producers/managers. However, a ‘’true PES’’ based on free market is either difficult to establish, or hardly existed in practice. Several arguments resonance against purely market-based PES schemes that commoditize ecosystem or nature under neoliberalism and does not necessarily benefit the poor. Our study in the Hindu Kush Himalaya, thus suggests to shift from a purely market-based mechanism to incentive-based mechanism for ensuring long term benefits to local mountain communities by rewarding their efforts on managing and restoring the ecosystems. We also argue that the concept of PES, if well integrated into the policy instrument could effectively ensure continued supply of ecosystem goods and services in Nepal Himalaya.