Position of the intermediary

The intermediary governs the coordination between provider(s) of ecosystem services and their user(s). The cases present three different arrangements concerning the position the intermediary takes in relation to them – with clear implications for the coordinating role.

Arrangement 1 places the intermediary close to the users of ecosystem services. The intermediary for water service provision in Colombia, which is institutionally aligned with the association of downstream water users, falls in this kind of arrangement.

Arrangement 1: Intermediary is aligned with ES user

Arrangement 2, on the other hand, sets an intermediary in the same place with the provider of ecosystem services. It is the case of peatland carbon offset scheme in the federal state of Mecklenburg-Vorpommern in Germany.

Arrangement 2: Intermediary is aligned with ES provider

Provider User

Intermediary

Provider User

Intermediary

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In Arrangement 3, an intermediary is considered to have an independent position from either the provider or the user of ecosystem services. The REDD+ partnership between Indonesia and Norway seems to arrange the intermediary along this type. In this particular case we limit the meaning of ‘independency’ of intermediary. First, independency of the intermediary is a result of involving actors from both forest service providers and users, having a relatively equal footing in decisions relevant to the intermediary. In this way one may expect internal dynamics emerges from such a two-side involvement, possibly leading to independency (or compromises) from both parties’ interests in decision making. Second, independency of intermediary results from involving independent actors external to both forest service provider and user.

Arrangement 3: Intermediary as a relative independent entity

In facilitating human coordination, the intermediary establishes rights and interaction rules and thereby also protects certain interests and values (Vatn, 2005; March and Olsen, 1989).

The intermediary and the PES scheme it facilitates may reinforce existing power structure (Corbera, Brown and Adger, 2007) or change it. The cases indicate that the intermediary in different institutional arrangements tends to represent interests of those it is aligned with, accountable to, or from which its financing source comes. It cannot be expected though that an intermediary is ‘interest-neutral’ if the positions of ES buyer and seller are on an equal footing and the intermediary is relatively independent from them (cf. Arrangement 3).

5. Conclusion

The aim of this paper was to characterize the variety of institutional features of intermediaries in PES and its implications in the functioning on the scheme. From the cases described we identified three types of arrangement of the intermediary in relation to ES providers and users:

the first, where the intermediary is aligned with the user of the ecosystem services; the second where the alignment is to the ecosystem service provider; and the third where the intermediary has an independent position relative to both. It is likely that in many cases, this position has implications for the organizational structure, the accountability mechanism, and the interests pursued by the intermediary itself.

An institutional analysis of intermediaries allows identifying how the intermediary affects the PES arrangement but also how the context in which it is embedded determines the interest that the intermediary represents. Although the importance of the design of the intermediary has received little attention in the literature so far, we consider that the determination of the type, organizational structure, funding and accountability mechanism of intermediary, is a key entry point to establishing more promising PES schemes under difficult – i.e. non-ideal, real-world - conditions.

Provider User

Intermediary

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Successful PES implementation will continue to depend on the willingness to experiment in uncertain terrain, on the pragmatism to start simple and subsequently become more sophisticated, and on the level at which learning and exchange of experience is being pursued and financed. This applies as much to the design of the intermediary as of the PES scheme itself.

The aspirations of intermediary agencies will be of outmost importance. They can focus on promoting a menu of contract options including region-specific ecological and social safeguards; they can strive to develop needs-oriented contents and formats for capacity building; they can pursue procedures to draw on already existing ecosystem knowledge for PES; alternatively, they can be protagonists of global standards that are exclusively science-based and conducive to confirm their lead role in shaping the growing PES business.

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