Countering with a Market Frame

Economic theories advocating markets for ecosystem services rose to global prominence in the late 1990s and diffused to Ecuador through the transnational networks described in chapter 4. As a result, many IWM advocates working in Ecuador between 1997 and 2004 initially employed a market frame. This was most evident in Ecuador’s earliest IWM reform efforts—Quito’s water trust fund, FONAG, Pimampiro’s payment for ecosystem services program, and Tungurahua’s initial campaign from 1997-2002—but also existed in later proposals in Ibarra and Pastaza.

The market frame defined the problem as the unsustainable use of natural resources due to inappropriate pricing. Because environmentally harmful behaviors were not sufficiently expensive, market failure ensued, producing negative externalities like water shortages and contamination. The proposed solution was to create a functioning market by altering the price of ecosystem goods and services. The benefits humans enjoy from watershed ecosystems were framed as “services,” whose value could be converted into a price. These ecosystem services could then be sold by “producers” and purchased by “consumers,” as in any other market. In this schema, landowners in a watershed, particularly catchment areas, were considered producers of ecosystem services regulating water. Downstream water users were consumers. The main challenge was calculating the appropriate price for these services so that producers had an incentive to ensure the continuation of ecosystem services by conserving and restoring strategic areas of the watershed. The benefits of forgoing environmentally harmful behaviors (e.g., expanding the agricultural frontier) must outweigh the costs.

Figure 6.1 shows a typical campaign poster using the market frame. This image was widely circulated and used by multiple coalitions. The market frame is also found in reform proposals, promotional materials, and public speeches. Those in Tungurahua are representative. Coalition documents consistently identified problems in the supply and demand for water and blamed them on the failure to place an economic value on ecosystem services (e.g., Foro Provincial de los Recursos Hidricos en Tungurahua 2002; Maldonado and Kosmus 2003). An early IWM reform proposal argued that, because natural resources constituted a form of “capital ... it is necessary to identify and value environmental goods and services as one element of the economic system” (Comision Ejecutiva Provincial 2002, 4). “Consumers” must make “payments” to those “producing” these goods and services. These payments represent the “opportunity cost of forgoing potential income that the land could generate through alternative economic activities” (Comision Ejecutiva Provincial 2002, 3, 15).

Countering with a Market Frame

Figure 6.1 Countering with a Market Frame. This image was used by Pastaza’s IWM coalition in publicity materials and originally appeared in Wunder 2005. Reproduced here by permission from Belcher B, Cossalter C, and Wunder S. 2005. Exchange. Photograph.

In “Payments for Environmental Services: Some Nuts and Bolts.” Occasional Paper No. 42. Bogor: CIFOR, 2005.

Through publicity materials and community meetings, IWM advocates educated local stakeholders about the natural water cycle in order to explain the interdependence among suppliers and consumers of watershed services and the environmentally destructive nature of existing production practices. They tried to motivate water users to pay for conservation and restoration efforts by convincing them this was necessary to improve access to quality water. To motivate farmers to change land use practices, IWM advocates presented the formulas used to calculate the opportunity costs of forgoing traditional livestock production and extolled the economic advantages of participating in conservation programs.

While many urban water users resisted the idea of paying more, farmers were the most resistant to the market frame. IWM advocates uniformly expressed surprise and frustration at how farmers rejected their offers, even though their formulas clearly showed that farmers could earn more through the compensation-for-conservation schemes than by raising cattle or growing crops. Many farmers simply did not act like rational economic actors. Interviews with local landowners suggest the market frame failed to motivate them because the frame directly countered strongly held cultural values.

Negotiations between Celica’s coalition and one landowner provide a typical example. This farmer made $80 per month selling cheese made from the milk produced by his 10 cows. Under the proposed compensation-for-conser- vation agreement, he would earn $160 monthly for removing the cattle from part of his land and allowing it to regenerate naturally. In addition to doubling his monthly income, he would no longer have the labor involved with caring for cattle and manufacturing cheese, no small consideration for the aging farmer. He also would have a guaranteed income rather than be subject to the risk of having his cattle stolen or die from thirst (a common occurrence during Celica’s dry summer months). As part of the compensation agreement, he also would not pay property taxes, saving him an additional $220 per year.

Despite these economic incentives, the farmer resisted signing the agreement. When asked why, he stressed his need to live off the milk, cheese, and meat provided by the cattle, simply saying “I have to eat my cow.”[1] The local IWM advocate responsible for negotiating with Celica’s landowners explained this by saying “cattle are a symbol ofwealth and prestige for people, and it is very difficult to overcome this cultural norm. ... There are always landowners that are a little more tied to the land and it is difficult to break this link with the land.”[2]

In Tungurahua and Ibarra, where farmers relied on irrigation and indigenous groups were present, resistance to markets for ecosystem services was even greater. In Tungurahua, local NGOs and small-scale farmers utilized both the production/poverty and environmental justice frames to oppose a proposed payment for ecosystem services program, labeling it unjust and anti-poor. They argued the program would place an unreasonable financial burden on farmers that rely on irrigation, which would exacerbate both poverty and the unequal distribution of water resources. Thus, the reforms challenged their goals of reducing poverty through expanded production. Indigenous groups (which represented indigenous smallholder farmers) agreed with these arguments, but also rejected the market frame as violating their cultural values, which prohibit the privatization and commodification of nature.

Rightly or wrongly, many Ecuadorians came to see payment for ecosystem services as commodifying nature and a dangerous step toward water privatization. When concern about water privatization made water management a national issue, the debate over payment for ecosystem services also became national. Equating watershed resources with Pachamama (a sacred deity revered by indigenous people in the Andes), Ecuador’s National Confederation of Indigenous Nationalities (CONAIE) and the environmental NGO Accion

Ecologica mobilized opposition through the slogan “Pachamama is not for sale!” (La Pachamama no se vende!).[3] CONAIE and other national indigenous associations directed their local affiliates to reject payment for ecosystem services programs, which they initially did (see chapter 7).

By the mid-2000s, it was clear that employing a market frame was a failed strategy. The term “payment for ecosystem services” was toxic in Ecuador. Even advocates stopped using it. Yet, they didn’t give up on basic IWM principles or their policy prescriptions. Rather, they looked for new ways to frame them. The need to find a new framing was acknowledged by international organizations meeting in Quito in April 2006 to discuss the impact and future prospects of market-based instruments in Latin America. The workshop report notes that:

There appears to be resistance to the term “payment” because some believe this implies automatically a privatization of the services. Experimentation with alternative names and meanings is underway.

This project is trying out the term “compensation for environmental services,” however, this also creates some negative noise when translated to Spanish (Poats 2007, 9).

  • [1] Interview by author, Celica, Ecuador, March 8, 2010.
  • [2] Interview by author, Celica, Ecuador, March 11, 2010.
  • [3] Accion Ecologica worked with CONAIE and other indigenous groups to produce a videoexpressing the arguments behind the slogan “Pachamama is not for sale,” available at 1503-video-la-pachamama-no-se-vende(accessed February 13, 2016).
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