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 www.oryxthejournal.org
The International Journal of Conservation
Volume 51 · Number 3
July 2017

Oryx
379 Weak yet strong: the uneven power relations of conservation, 471 Extinct flagships: linking extinct and threatened species,
C. Sandbrook P.M. Kyne & V.M. Adams
381 Briefly 477 The IUCN Wild Pig Challenge 2015, M. Linkie, J. Ng,
391 Conservation news Z.Q. Lim, M.I. Lubis, M. Rademaker & E. Meijaard
482 Are conservation assessments of threatened species reliable?
Letters Updated distribution of the Endangered Sardinian newt
400 If we want a whole Earth, Nature Needs Half: a response Euproctus platycephalus and implications for Red List www.oryxthejournal.org

Volume 51 · Number 3 · July 2017 · pp. 379–567

to Büscher et al., P. Cafaro, T. Butler, E. Crist, P. Cryer,
E. Dinerstein, H. Kopnina et al.
401 Doing Whole Earth justice: a reply to Cafaro et al.,
B. Büscher, R. Fletcher, D. Brockington, C. Sandbrook,
B. Adams, L. Campbell et al.
402 The great bustard reintroduction trial: a response
to Ashbrook et al., R. Manvell & P. Goriup
403 Distribution of grey wolves Canis lupus lupus in the Nepalese
Himalaya: implications for conservation management,
S.A. Subba, A.K. Shrestha, K. Thapa, S. Malla, G.J. Thapa,
S. Shrestha et al.
407 Half-Earth or Whole Earth? Radical ideas for conservation,
and their implications, B. Büscher, R. Fletcher, D. Brockington,
C. Sandbrook, W.M. Adams, L. Campbell et al.
Hunting and trade
411 Shades of grey: the legal trade in CITES-listed birds in Singapore,
notably the globally threatened African grey parrot Psittacus
erithacus, C.M. Poole & C.R. Shepherd
418 Bushmeat hunting around a remnant coastal rainforest in
Côte d’Ivoire, S.G. Bi, I. Koné, J.C.K. Béné, E.A. Bitty, K.A. Yao,
B.A. Kouassi & P. Gaubert
428 Exploring drivers and deterrents of the illegal consumption
and trade of marine turtle products in Cape Verde, and
implications for conservation planning, J.M. Hancock,
S. Furtado, S. Merino, B.J. Godley & A. Nuno
437 The supply of illegal tortoise meat to Toliara City, south-western
Madagascar, T. Manjoazy, J.H. Razafimanahaka, W. Ronto,
R. Randrianavelona, J.U. Ganzhorn & R.K.B. Jenkins
Plant conservation
441 Conservation status and management insights from tracking
a cryptic and Critically Endangered species of Orchidaceae,
T. Kraaij, J.A. Baard & B.J. Crain
451 Distribution and conservation status of the Endangered pepperbark
tree Warburgia salutaris (Canellaceae) in Swaziland, M.N.
Dludlu, P.S. Dlamini, G.F. Sibandze, V.S. Vilane & C.S. Dlamini
455 Are we working to save the species our children want to protect?
Evaluating species attribute preferences among children,
K. Frew, M.N. Peterson & K. Stevenson
464 Participation of natural resource managers on editorial
boards of conservation and applied natural resource journals,
S.K. Carter & A.H. Fayram
assessments of Italian amphibians, L. Vignoli, D. Macale, Published for
L. Luiselli, R. Lecis & P. Casula Fauna & Flora International July 2017 · Volume 51 · Number 3
489 Payments for ecosystem services in Indonesia, H. Suich,
M. Lugina, M.Z. Muttaqin, I. Alviya & G.K. Sari
498 Asian snake farms: conservation curse or sustainable enterprise? Grey wolf in the Nepalese Himalaya
P.W. Aust, N. Van Tri, D.J.D. Natusch & G.J. Alexander
506 Modelling harvest of Asian elephants Elephas maximus on the basis
Distribution and conservation
of faulty assumptions promotes inappropriate management
solutions, J.P. Puyravaud, P. Davidar, R.K. Srivastava & B. Wright Weak yet strong
513 Unmanned aerial vehicles mitigate human–elephant conflict
Conservation´s uneven power relations
on the borders of Tanzanian Parks: a case study, N. Hahn,
A. Mwakatobe, J. Konuche, N. de Souza, J. Keyyu, M. Goss et al.
517 Can pastoral communities offer solutions for conserving the Half-Earth or Whole Earth?
Endangered Grevy’s zebra Equus grevyi at the periphery of its Implications of radical ideas
range? G.E. Parker, Z. Davidson, B. Low, P.R. Lalampaa,
S. Sundaresan & M. Fischer
527 Crop raiding by wild mammals in Ethiopia: impacts on the Hunting and trade
livelihoods of smallholders in an agriculture–forest mosaic Shades of grey in Singapore
landscape, T.G. Ango, L. Börjeson & F. Senbeta
538 Distribution and status of the African forest buffalo Syncerus Bushmeat in Côte d’Ivoire
caffer nanus in south-eastern Nigeria, E.A. Eniang, C.O. Ebin, Marine turtle products
A.A. Nchor, G.I. Agba, I.K. Gideon, G. Amori & L. Luiselli Illegal tortoise meat
542 Placing Madagascar’s marine turtle populations in a regional
context using community-based monitoring, F. Humber,
B.J. Godley, T. Nicolas, O. Raynaud, F. Pichon & A. Broderick Plant conservation
554 Monitoring for adaptive management in a trial reintroduction Tracking a cryptic orchid
of the black-footed rock-wallaby Petrogale lateralis, R. West,
J.L. Read, M.J. Ward, W.K. Foster & D.A. Taggart
Endangered pepperbark tree
564 The Vulnerable giant anteater Myrmecophaga tridactyla: new
records from the Atlantic Forest highlands and an overview
of its occurrence in protected areas in Brazil, F.C. Passos,
M.C.H. Mello, E. Isasi-Catalá, R.C. Mello, I.P. Bernardi,
L.H. Varzinczak & C.S. Lima
567 Grants & opportunities
Cover The grey wolf is Critically Endangered in Nepal, and is a
protected species there. A new compilation of data from faecal and
camera-trap surveys and published sources indicates that the species
is distributed over 73% of the Nepalese Himalaya. There is evidence
of recovery of the grey wolf population in Kanchenjunga Conservation
Area in the eastern portion of the species’ range, where a livestock
insurance scheme has been shown to be a viable option for reducing
retaliatory killing of wolves as a result of livestock depredation. For further
details, see pp. 403–406. (Photograph © Peter Cairns/NaturePL.com).

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Payments for ecosystem services in Indonesia
HELEN SUICH, MEGA LUGINA, MUHAMMAD ZAHRUL MUTTAQIN
I I S A L V I Y A and G A L I H K A R T I K A S A R I
Abstract Payments for ecosystem services schemes are
viewed as having the potential to achieve positive biodiver-
sity and ecosystem service outcomes and social outcomes,
and they have been widely studied since their development
in the s. We describe the state of payments for ecosys-
tem services in Indonesia, where nine schemes were identi-
fied, four involving water and five involving carbon. We also
assess the perceptions of stakeholders (donors, government,
and non-government agencies) regarding the status of such
schemes in Indonesia, and their views on what factors sup-
port or constrain their development. The main factors per-
ceived to support payments for ecosystem services schemes
were easily identifiable ecosystem services and service users,
and the long-term support provided by individuals or
institutions that facilitate the schemes, building on existing
relationships between communities and these facilitating
agencies. Stakeholders identified problems relating to regu-
lation: the lack of regulation specifically in relation to
payments for ecosystem services, but also overlap and un-
certainties regarding regulations. Other constraining factors
identified were the lack of recognition of environmental
problems amongst potential buyers, and issues of rights
and tenure for local communities. With so few operational
programmes to date, covering a relatively small land area,
and such constraints to further development, payments
for ecosystem services schemes appear to have limited
scope to supply ecosystem services successfully and sustain-
ably at scale.
Keywords Forest conservation, Indonesia, payments for
ecosystem services, perceptions, stakeholder assessment
Introduction
I ndonesia has the third largest expanse of tropical forest,
with globally important biodiversity and carbon stores
and locally important ecosystem service delivery. The coun-
try has experienced high rates of deforestation since the
s (Hansen et al., ), with c. . million ha of
HELEN SUICH (Corresponding author) Australian National University, Crawford
School of Public Policy, Canberra, Australian Capital Territory, Australia
E-mail helen.suich@anu.edu.au
MEGA LUGINA, MUHAMMAD ZAHRUL MUTTAQIN, IIS ALVIYA and GALIH KARTIKA SARI
Forestry Research, Development and Innovation Agency, Ministry of Forestry,
Bogor, Indonesia
Received  December . Revision requested  January .
Accepted  February .
Oryx, Page 1 of 9 © 2016 Fauna & Flora International doi:10.1017/S0030605316000259
primary forest lost during – (Margono et al.,
), and is the third largest emitter of greenhouse gasses
(Sloan et al., ). Several activities have been implemented
to reduce deforestation rates, with considerable attention
being given to the potential for REDD+ (Reduced Emissions
from Deforestation and forest Degradation) activities
(Maryani et al., ; WWF, ; Luttrell et al., ;
Moeliono et al., ; Sills et al., ), and a moratorium
on new agriculture and logging licences and concessions
was announced by the President in  (Murdiyarso
et al., ; Sloan, ).
The central principle of payments for ecosystem services
schemes is that the providers of ecosystem services should
be compensated for their efforts, and those who benefit
from those services should pay for their provision (Pagiola
& Platais, ), as is the case with most non-environmental
goods and services. Such schemes have been identified as
having the potential to contribute to the supply of ecosystem
services, including carbon and other services, and globally in
  active payments for ecosystem services pro-
grammes were identified just for watershed services, with
a further  projects in development (Bennett et al., ).
Available literature suggests that payments for ecosystem
services schemes have been operating in Indonesia for more
than a decade (Landell-Mills & Porras, ), where they are
reported to have spread relatively quickly (Suyanto et al.,
) and be relatively widely accepted (Fauzi & Anna,
). Most of this literature (both published and grey) ana-
lyses aspects of project design or implementation (Suyanto
et al., ; Wunder et al., ; Leimona et al., ; Pirard
& Billé, ; Ajayi et al., ), or some aspect of institu-
tional arrangements (Arifin, ; Collins et al., ;
Fauzi & Anna, ).
Two gaps in the available analyses are apparent. The first
is that a majority of the analyses of Indonesian payments for
ecosystem services schemes have focused on a few pilot pro-
jects, and therefore it is not clear how widely such schemes
have been implemented across the country. The second is
the rarity of cross-project analysis; such synthesis is a useful
means of drawing lessons from experience, as has been
occurring elsewhere in South-east Asia (Pham et al., ;
Milne & Chervier, ; Nabangchang, ; VFPDF,
) and in the design of similar or more recent incentive-
based programmes such as REDD+ (Wunder, ;
Tacconi et al., a; Caplow et al., ; Corbera, ;
Mahanty et al., ; Karsenty et al., ; Loft et al., ).
We attempted to address both of these gaps by investigat-
ing current and historical schemes involving payments (ei-
ther in cash or in kind) to ecosystem service suppliers in
2 H. Suich et al.
Indonesia, where the payments are conditional on the cre-
ation or maintenance of those ecosystem services. We also
aimed to assess the experience of payments for ecosystem
services in Indonesia with respect to how differences in
the design of benefit-sharing mechanisms affect the incen-
tives for community participation in ecosystem service sup-
ply schemes, and the impacts of such schemes on the
livelihoods of participants. Finally, we examined stake-
holders’ views of the factors that support or constrain the
development of payments for ecosystem services schemes
in Indonesia.
Methods
The first step in assessing the experience of payments for
ecosystem services schemes in Indonesia was to compile a
comprehensive list of all projects and programmes with a
direct payments approach to the provision of ecosystem ser-
vices, whether individually or bundled (i.e. in combination).
This was achieved by searching both published and grey lit-
erature for projects described as being (or having the poten-
tial to be) linked to an ecosystem service market. To reduce
the chance of excluding relevant projects in the first in-
stance, the search and construction of a long-list was de-
signed to be as inclusive as possible and incorporate a
wide range of projects, including those described specifically
as payments for ecosystem services, as well as others (e.g.
those described as REDD+, clean development mechanism
or voluntary carbon standard projects).
Information was then sought about partners (individuals
or organizations) involved in the design, implementation or
funding of the scheme, whether they were government or
non-government, Indonesian or international. To determine
if the long-listed projects could be categorized as payments
for ecosystem services schemes, one or more partners repre-
senting each scheme were contacted by telephone or email
and questioned about the projects to determine whether
they matched the specified criteria for such a scheme.
The definition of payments for ecosystem services is
widely discussed in the literature (e.g. Wunder, ;
Tacconi, ; Derissen & Latacz-Lohmann, ; Sattler
& Matzdorf, ; Wunder, ). For the purposes of this
research, schemes were included in the analysis if the pur-
pose of the scheme was to create or sustain the provision
of ecosystem services by sellers who participated voluntarily;
buyers paid for either () activities considered to generate
ecosystem services provision (i.e. payments for inputs,
where payments were based on some biological or ecological
understanding of the connection between the activity being
paid for and the provision of ecosystem services), or ()
direct provision of ecosystem services (i.e. payments for out-
puts); payments were made only if agreed criteria to provide
ecosystem services were met (i.e. there was conditionality);
Oryx, Page 2 of 9 © 2016 Fauna & Flora International doi:10.1017/S0030605316000259
and the scheme had made or was currently making pay-
ments for provision of ecosystem services at one or more
sites in Indonesia.
Project contacts for long-listed projects were interviewed
to determine whether the projects met these criteria. They
were also questioned about their knowledge of other pro-
jects (i.e. snowball sampling) to ensure our coverage of ac-
tual and potential projects was as complete as possible.
Information derived from this fact-checking was used to
confirm the existence of projects; to add, supplement or
amend information about projects; or to remove projects
that did not meet the criteria from the long-list.
We consulted a variety of stakeholders to elicit their per-
spectives about the reasons for the success of payments for
ecosystem services schemes, and constraints to the expan-
sion of such schemes in Indonesia. In the first instance we
interviewed stakeholders involved in projects that met the
selection criteria. We also interviewed a number of other
stakeholders who could reasonably be interpreted as playing
(or potentially playing) a role in supporting, designing or
implementing local-level payments for ecosystem services
schemes. A total of  interviews were conducted, with na-
tional government officials (), representatives of national
and international conservation NGOs (), representatives
of international donor agencies (), stakeholders (including
in the private sector) who were actively involved in existing
or developing payments for ecosystem services or REDD+
activities (), and payments for ecosystem services research-
ers in Indonesia (). The interviews took place during
March, August and October .
Our aim is to improve the understanding of factors that
facilitate and constrain the development of payments for
ecosystem services schemes in Indonesia, not to judge the
merits, or otherwise, of the projects being implemented.
Determining the spread of such schemes is important in
assessing whether the proponents have been successful in
creating sustainable mechanisms for ecosystem services
provision over time, and whether the schemes have achieved
their potential as a sustainable means of paying for conser-
vation (Pagiola, ). We also sought to understand the
factors supporting or constraining the spread of payments
for ecosystem services activities, because of the direct impli-
cations for REDD+ schemes planning to work with local
communities to provide carbon sequestration services.
Notes from all  interviews ( interviewees) were tran-
scribed and then analysed using NVivo v.  (QSR
International, Melbourne, Australia). All interviews were
coded for a number of themes. One thematic group related
to the motivation for project design, including views on the
types of payments to communities or individuals typical of
payments for ecosystem services schemes. Another group
related to the reasons for the lack of spread of such schemes
across Indonesia, and elements that may facilitate such
spread in the future. Interviews in which an active or

defunct scheme was discussed were also coded for elements
of the design of the scheme. Our results are drawn from
these interviews unless otherwise indicated. Discussions
about payments for ecosystem services schemes in this
paper include local-level REDD+ schemes that make pay-
ments for carbon sequestration activities, but where the
REDD+ is referenced specifically this is made clear in the
quoted material.
A number of interviewees represented organizations that
were initially identified as supporting payments for ecosys-
tem services schemes but which further investigation re-
vealed not to be the case. The views of these interviewees
are not considered in relation to the development of existing
schemes (see Perceptions of payments for ecosystem ser-
vices) but they are included in the presentation of stake-
holders’ views, and in the Discussion, as they facilitate
understanding of the development of payments for ecosys-
tem services in Indonesia.
Results
Payments for ecosystem services projects in Indonesia
Once projects were identified (and duplicates removed), the
long-list featured  projects. We contacted key institutions
about each of these projects and removed those that did not
meet the above-mentioned criteria, leaving nine projects
that had been or were actively making conditional payments
for the provision of ecosystem services. In the interim, one
of these, the Kalimantan Forests and Climate Partnership
project, has ceased operations (Howes, ).
Projects were excluded from further consideration for a
number of reasons; for example, if a project description had
been found in the literature but no project was actually de-
veloped and implemented. In a number of cases the projects
described failed to incorporate payments and conditionality
as part of their implementation strategies. Several projects
that were in the design or implementation phase were not
included in the analysis because they were yet to make
any conditional payments for ecosystem services provision.
The key features of the schemes that met all of the selec-
tion criteria are described in Table . The schemes include
communities in several districts across Indonesia and involve
a range of community and private sector sellers of ecosystem
services, non-governmental and private sector intermediary
organizations, and both private and public funders (purcha-
sers of ecosystem services). Schemes were identified for water
and carbon services only, and all schemes involved similar ac-
tivities, primarily forest conservation and tree planting. None
of these schemes bundled ecosystem services.
Several features of these existing projects meant that fur-
ther investigation of the impact of design elements on liveli-
hoods and community and individual participation would
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Payments for ecosystem services 3
not yield meaningful results at this stage. Many are pilot
or demonstration schemes (Pirard & Billé, ). This cre-
ated an expectation that a variety of design mechanisms and
activities would be tested by the various schemes. However,
variation in design characteristics appears to be correlated
with the intermediary organizations, with each using similar
designs for the projects they are involved in. This similarity
of design elements may mean that opportunities to learn
from implementation are reduced because of the relative
lack of diversity in design, although not with respect to
the context of operation. However, the two most important
features that made an impact analysis non-viable were the
recent start date of payments in several schemes (meaning
impacts would not have had sufficient time to emerge)
and, in most cases, the relatively small payments being
made to ecosystem services sellers.
Perceptions of payments for ecosystem services
Interviewees held a wide range of views about the appropri-
ateness of payments for ecosystem services schemes (and
REDD+ as a subset of such schemes) in ensuring the provi-
sion of ecosystem services in Indonesia. One interviewee
(interviewee ) noted that ‘people seem to be quite polar-
ized. They either think it’s the answer to everything or it’s
evil. Very few people sit in the middle.’
The greatest range of views on the potential, or otherwise,
of payments for ecosystem services schemes to contribute to
conservation was found amongst the intermediary agencies
(large and small, domestic and foreign NGOs), approxi-
mately half of which were actively involved in the design
and implementation of payments for ecosystem services
schemes.
Of those not involved in project implementation ap-
proximately half actively opposed payments for ecosystem
services and expressed a dislike of direct payments to com-
munities. According to interviewee , ‘it’s almost a black-
mail kind of thing, where people will say they’ll hold the
chainsaw to the tree: if you don’t pay us, we’ll cut it
down.’ Interviewee  suggested that front-loading payments
for activities was akin to bribing the community. However,
the other half of non-implementing intermediaries took a
less oppositional stance, generally agreeing that ‘monetary
incentives are not always the answer to a lot of problems,
particularly conservation problems’ (interviewee ).
Intermediaries involved in payments for ecosystem ser-
vices projects supported cash payments, and particularly
the agency of community members: ‘We want transaction
payments. Whether the money will be used for this or that,
it’s their [the communities’] business. . .it’s up to them’ (inter-
viewee ). However, even within an organization that actively
supported payments for ecosystem services, the view was
held that ‘payments for ecosystem services will be
exceptional. . .REDD+ is included in this. The issue is, to
 4
H. Suich et al.
TABLE 1 Key features of payments for ecosystem services (PES) schemes implemented in Indonesia.

Start of
Scheme Province PES Seller Buyer Payment Intermediary Activity
Water
Cidanau Banten 2001 c. 30 farmer groups State-owned IDR 1.2 million per ha Stakeholder group Tree planting, agroforestry
enterprise
Mount Rinjani Lombok/Nusa 2009 25 groups in 12 Water association IDR 30–80 million per NGO Rehabilitation, reforestation
Payments for Tenggara Barat villages members/users group
Watershed Services
Aceh Payments for Aceh 2009 10 farmer groups Companies IDR 70–90 million per NGO & stakeholder Tree planting, prevent tree
Watershed Services contract group cutting & pollution
Sumberjaya Lampung 2007 3 villages Company IDR 1.5–1.6 million per ha NGOs Tree planting, river bank con-
servation, construction of ter-
races & sediment pits
Carbon
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Ketapang West 2013* Villages Donors (including IDR 100,000,000 per vil- NGO Avoiding planned
Kalimantan private foundations) lage per annum deforestation
Merangin Jambi 2013* Villages Donors (including IDR 100,000,000 per vil- NGO Avoiding unplanned
private foundations) lage per annum deforestation
Rimba Raya Central 2008 (but Private sector (ecosys- Private sector Not applicable (90 million Avoiding planned
Kalimantan not sales)* tem restoration con- t, 30 years; 2.2 million deforestation
cession licence) verified carbon units)
Berau Forest Carbon East 2007 Villages Donor USD 25,000 per village per NGO Reduced deforestation, forest
Programme Kalimantan (international) annum rehabilitation
Kalimantan Forests Central 2010– Villages Donor AUD 1.8 million total Kalimantan Forests Tree planting, intended canal
& Climate Kalimantan 2014* (international) & Climate blocking
Partnership Partnership
*These schemes are paying for inputs (i.e. compensating participants for their activities) rather than paying for outputs.

do this you need a lot of money. But if there is a lot of money
then there are too many power issues, and powerful people
put their interests [first]’ (interviewee ).
Within government, donor and other stakeholder groups,
differences in opinion were less extreme. Even where these
categories of stakeholders were not actively involved in de-
signing, implementing or funding payments for ecosystem
services projects, all interviewees were broadly supportive of
the principles of the use of conditional incentive payments to
achieve outcomes. However, one donor (interviewee )
made the distinction between projects for carbon and those
for other ecosystem services, being generally unsupportive
of project-level activities for carbon because ‘they don’t ad-
dress the threats [at a large enough scale].’
Too few interviews were held with private-sector person-
nel to gain an understanding of the breadth of support for
payments for ecosystem services mechanisms but there was
enthusiasm for the principle amongst those interviewed.
Although it was beyond the scope of this research to inves-
tigate the demand for ecosystem services amongst the pri-
vate sector, future research in this area would be valuable,
focusing not only on large enterprises and multinationals
but also on small and medium-sized businesses.
Despite the support for payments for ecosystem services
expressed by all national government representatives inter-
viewed, the government, and specifically the Ministry of
Forestry, was perceived by non-government respondents
as lacking the interest or political will to actively support
the implementation of projects. The awareness and under-
standing of payments for ecosystem services amongst pro-
vincial and district government departments and officials
were also questioned.
Stakeholders’ views on why payments for ecosystem ser-
vices approaches had not spread more widely in Indonesia
were categorized into macro- and micro-level concerns. The
former related to the policy and regulatory environment in
which payments for ecosystem services schemes would be
introduced, and the latter to the operationalization of pay-
ment schemes. A number of macro-level constraints were
identified, and despite the stated support of government
for payments for ecosystem services schemes, many of the
macro-level constraints centred on government actions
and the regulatory context in which projects were imple-
mented, as well as issues of trust.
The first constraint to be overcome was how to get buyers
and sellers to recognize the problems of land and forest deg-
radation, and the increasing scarcity of certain ecosystem
services, as some in the private sector retained the belief
that ‘ecosystem services are free’ (interviewee ). Even
where demand for ecosystem services had been exhibited,
the commitment of the private sector to purchasing ecosys-
tem services as a routine business operation was questioned
because payments are often made from corporate social re-
sponsibility (CSR) funds rather than being treated as
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Payments for ecosystem services 5
operating costs. According to interviewee , ‘it is still philan-
thropic in many ways, and companies are trying to be good
corporate citizens. The majority of it is CSR-related.’
Just under % of respondents felt there was potential for
increasing demand for ecosystem services, with % of those
identifying the private sector as a potential buyer of ecosys-
tem services (surprisingly positive views, given that few
firms are currently involved in active payments for ecosys-
tem services projects in Indonesia), although approximately
half of these indicated that they would only be willing to
purchase ecosystem services if regulations required them
to do so. One respondent stated that the private sector
would have no interest in financing payments for ecosystem
services schemes. The remaining respondents identified the
Indonesian government and foreign donors as potential fi-
nanciers of such schemes.
The respondents who suggested that the private sector
would potentially be interested in paying for ecosystem ser-
vices believed that private sector participation was currently
constrained by uncertainty about the future. In the early
days of REDD+ there was considerable interest but most
projects were dropped because of the global financial crisis,
the delays in negotiating project design and implementation
amongst the partners, and the uncertainty around rights
and benefit-sharing mechanisms.
The second constraint identified was the questionable
level of government commitment to payments for ecosystem
services, as demonstrated by the persistence of overlapping
and conflicting regulations and the apparently ineffective
regulatory development processes. More than % of inter-
viewees drew attention to the issue of conflicting and overlap-
ping regulations and the shifting policy regime, exacerbated
by the various levels at which regulations can be enacted (dis-
trict, provincial and national) and the multiple ways in which
they can be interpreted. This results in uncertainty.
The uncertainty of the regulatory environment in
Indonesia was contrasted with regulation of payments for
ecosystem services in other locations, including Costa
Rica, where ‘there is a clear law and a very strong certainty
related to the law, so people are willing to pay because there
is certainty and clarity’ (interviewee ). In fact, the Costa
Rican scheme is largely funded by government through
the collection of taxes, primarily on fuel but more recently
also on water (Porras et al., ).
The regulatory development process within government
also contributes to this uncertainty. Although regulation re-
lated to payments for ecosystem services schemes has been
ready for  years, ‘some bureaucrats are not there to take
risks’ (interviewee ), and it has not been put forward for
official approval. Furthermore, ‘there needs to be clear guid-
ance, but I don’t know whether the government is quite ser-
ious to consider this’ (interviewee ).
One quarter of respondents felt that a lack of regulation
was a stumbling block to the spread of payments for
6 H. Suich et al.
ecosystem services schemes in Indonesia. However, when
asked about the type of regulations that were lacking they
could rarely identify specific issues that, if resolved, could
support the establishment of such schemes. The lack of
available mechanisms to deliver payments legally at the
community level was identified repeatedly. However,
schemes currently in operation are already making pay-
ments using a variety of mechanisms, and therefore this
constraint appears to relate more to a lack of knowledge
than to a need for additional regulation.
A further constraint associated with the regulatory envir-
onment was the lack of ‘synchronization and coordination’
between ministries. This may be partially overcome by the
merger between two ministries into the Ministry of
Environment and Forestry, which began in late , but
it will depend on the leadership and operations within the
new ministry. Coordination with the finance ministry will
remain critical because it holds the responsibility for devel-
oping regulations regarding benefit sharing.
The lack of clarity over property rights is perceived as a
critical constraint to the spread of payments for ecosystem
services schemes but is recognized as a factor affecting rural
development generally, and not only payments for ecosys-
tem services projects. ‘Without well-defined rights it is
very difficult to develop a mechanism and to address who
is going to benefit’ (interviewee ), and to determine who
the ecosystem service sellers are. It will be necessary to ‘sup-
port communities to have their tenure rights clarified. Once
you’ve done that, then you can layer a project on top of that,
but unless you’ve solved that you’ve got too much uncer-
tainty’ (interviewee ).
Interviewees from all stakeholder groups noted that the
length of time required to operationalize a project was a fac-
tor reducing the incentive to participate. Some delays were
attributable to the uncertain regulatory environment and
also to the need to build trust between the parties, in most
cases between ecosystem services sellers (communities) and
intermediaries: ‘in our experience, it is a long process to en-
sure that we don’t just come to the village and spend money,
but that they understand. This needs a long run process, not
an instant process’ (interviewee ). This process had taken
more than  years in at least two of the operating projects.
Government processes can also delay aspects of projects.
Although the Rimba Raya project started in  and gen-
erated carbon credits from that time, the credits could not be
sold until after the project was granted a full restoration li-
cence in . For another project, in the Cidanau water-
shed, it took  years to finalize negotiations with the
buyer. Three intermediaries involved in payments for eco-
system services projects stated that projects had been aban-
doned by buyers because of the length of time it took to
reach agreements between all parties, particularly for carbon
services.
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Discussion
The majority of the stakeholders interviewed were support-
ive of the principle of using incentive-based mechanisms,
such as payments for ecosystem services schemes, although
only approximately half were directly involved in the design,
implementation or funding of such schemes in Indonesia.
Three intermediary institutions expressed dissatisfaction
with the idea of paying communities for the provision of
ecosystem services. The identified constraints to the spread
of payments for ecosystem services projects in Indonesia can
be categorized broadly as a lack of recognition that degrad-
ation and scarcity of ecosystem services is a problem, and
the constraints imposed by the conflicting and uncertain
regulatory environment.
The lack of recognition amongst buyers and sellers of the
problems associated with environmental degradation is not
unique to Indonesia (GCP et al., ). Although the num-
ber of projects scoped, especially carbon-related projects,
suggests that initial interest was relatively strong, the subse-
quent lack of implementation suggests that the transaction
costs associated with the transition from design to imple-
mentation were too high, particularly for potential buyers.
The dearth of programmes being driven by the private
sector, and the use of corporate social responsibility funds
to purchase ecosystem services seem to support the sugges-
tion that the private sector does not yet recognize the scar-
city of ecosystem services as a threat to continued
operations, or that environmental degradation may be an
externality that they are (partially) responsible for.
Additionally, it has not been clear whether, or where, the
benefits of ecosystem service delivery exceed the costs, al-
though recent studies go some way towards addressing the
lack of information regarding values and the distribution of
benefits from ecosystem services (Prasetyo et al., ;
Yamamoto & Takeuchi, ; Sumarga et al., ;
Suwarno et al., ).
A lack of information about the operation of payments
for ecosystem services schemes is likely to have a negative
impact on the understanding and awareness of such
schemes, particularly amongst provincial and district gov-
ernments, which have a critical role in natural resource
management. Without such information, governments are
unlikely to shift their focus from productive utilization,
where ‘policy is driven by a timber mindset’ (interviewee
).
The remaining constraints contributed to the uncer-
tainty facing both potential purchasers and suppliers of eco-
system services, apparently adding significantly to the
transaction costs of a scheme (i.e. the costs of defining the
service to be traded, finding trading partners, and negotiat-
ing and closing contracts; Niehans, , cited in Coggan
et al., ).

The constraints affecting payments for ecosystem ser-
vices in Indonesia overlap significantly with the reasons
identified for the poor spread of payment schemes for
watershed services in sub-Saharan Africa (Ferraro, )
and with constraints to other such schemes elsewhere
(Vatn, ; Alix-Garcia & Wolff, ). They also align,
in reverse, with the economic, institutional and cultural pre-
conditions for payments for ecosystem services as identified
by Wunder (). Economic preconditions are that the
benefits exceed the costs of any intervention (as discussed
above), cultural preconditions describe the necessity for
both users and providers to have a motive for action, where-
as the institutional preconditions relate to trust, transaction
costs and tenure (Wunder, ).
Schemes operating in Indonesia have demonstrated that
buyers can be organized to make payments for ecosystem ser-
vices but only in circumstances where intermediaries initiate
activities. This may be because intermediaries cut transaction
costs by developing a formula for project design and imple-
mentation (Banerjee et al., ); in Indonesia each inter-
mediary involved in multiple active projects made similar
choices about mechanism design (Table ).
Although factors supporting the establishment and con-
tinuation of the projects identified were not discussed expli-
citly during the interviews, schemes that have been
implemented successfully have evidently been built on
trust (Wunder, ). In all active schemes, intermediary
agencies had been working with community providers of
ecosystem services in each location prior to the introduction
of payment schemes. The trust fostered during this time
seems to have been a factor in reducing transaction costs,
thus improving the viability of project implementation
(Sunderlin & Sills, ). This kind of trust-building has
been described as a contributor to the success of the
Cidanau watershed scheme (Leimona et al., ), and
other schemes (Tacconi et al., b; Mahanty et al., ;
Namaalwa & Nabanoga, ).
Clarity and security of tenure are institutional precondi-
tions for payments for ecosystem services schemes, and are
generally problematic in Indonesia. Almost all stakeholders
identified the lack of clarity and security of tenure as a
constraint to payments for ecosystem services schemes,
and issues related to land tenure have been studied exten-
sively in Indonesia (Collins et al., ; Indrarto et al.,
; Murdiyarso et al., ; Resosudarmo et al., ;
Sunderlin et al., ).
Ecosystem services have been identified as a way of ‘es-
caping the control of public authorities’ (Pirard, ,
p. ), as the absence of regulation facilitates more adaptive
management of projects. However, in Indonesia there is de-
mand amongst stakeholders for government guidance and
regulation to reduce the uncertainty regarding payments
for ecosystem services. Furthermore, government guidelines
and regulation may raise the profile of payments for
Oryx, Page 7 of 9 © 2016 Fauna & Flora International doi:10.1017/S0030605316000259
Payments for ecosystem services 7
ecosystem services, and thus encourage buyers to partici-
pate. However, this would not be successful if any new regu-
lation simply added to the existing conflictual and
overlapping regulatory regime. It is our opinion that im-
proving the clarity of the regulatory environment would
be of greater benefit.
The necessity of government involvement is more
straightforward in some cases; for example, in the
Cidanau watershed scheme, government regulation was ne-
cessary to facilitate implementation (Pirard et al., ).
Government agencies that are not primarily concerned
with environmental outcomes could be important in driving
wider implementation of payments for ecosystem services
schemes (e.g. to achieve poverty alleviation outcomes;
Rosa da Conceição et al., ). The merger between the
ministries of forestry and the environment is a cause for op-
timism that the development of payments for ecosystem ser-
vices may accelerate.
These findings confirm the conclusions of other re-
searchers: although many potential schemes have been
identified and projects announced, there is little informa-
tion available about them (Landell-Mills & Porras, ;
Heyde et al., ). There has also been a lack of learning
from activities and a lack of analysis of experiences,
which continues to be the case in Indonesia. Some projects
have been underway for more than a decade and have
hosted numerous study visits, yet many of the issues
identified in this study as reasons for the lack of spread of
payments for ecosystem services schemes in Indonesia
have been at least partially addressed by existing projects.
High transaction costs appear to be the most significant
constraint to the scaling-up of payments for ecosystem ser-
vices schemes. It would thus be useful to understand the
role, if any, of such costs in schemes that are already in op-
eration, and to identify opportunities to reduce the transac-
tion costs of these schemes and payments for ecosystem
services schemes more generally.
Despite the low rate of expansion of payments for ecosys-
tem services in Indonesia after more than a decade of activ-
ity, it may be premature to be disillusioned with such
schemes as a means of achieving conservation and social
goals (Redford & Adams, ) given the relatively limited
experience of their implementation and application in the
country.
Acknowledgements
This research was funded by the Australian Centre for
International Agricultural Research, project FST//.
We thank Mary Milne, Gabriela Scheufele and Luca
Tacconi for their insightful comments. The perceptive com-
ments of two anonymous reviewers were also appreciated.
Any remaining errors are the responsibility of the authors.
8 H. Suich et al.
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Biographical sketches
HE L E N SU I C H is a development economist whose work focuses on
poverty alleviation and sustainable livelihoods, and issues related to
the sustainable management of ecosystem services in changing envir-
onments. She has worked across southern Africa for the last  years
and in Indonesia for the last two. ME G A LU G I N A is interested in forest
economics and policy, especially the management of forest ecosystem
services. MU H A M M A D ZA H R U L MU T T A Q I N is interested in forest eco-
nomics and policy, especially the utilization of forest ecosystem ser-
vices and community-based forest management. II S AL V I Y A is
interested in regional economic development, and her research has fo-
cused on forest socio-economics. G A L I H K A R T I K A S A R I ’s research
interests focus on public administration.