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Regulation of the Ecosystem Services Compensation Mechanisms Law in Peru

The Government of Peru approved the regulation of its groundbreaking Ley de Mecanismos de Retribuciones por Servicios Ecosistémicos, a 2015 law passed under the leadership of Peru's visionary Environment Minister, Manuel Pulgar-Vidal.

This regulation represents a critical piece of the legal puzzle to ensure that Mecanismos de Retribución por Servicios Ecosistémicos (MRSEs), essentially the Peruvian version of payments for ecosystem services, are sanctioned under Peruvian law. In particular, it provides the necessary legal signal to permit public investment to flow to MRSEs. As an example, in the water & sanitation sector, over US$30 million has already been set aside for MRSE mechanisms to help secure water supply for Peruvian cities by investing in watershed conservation. The new regulation provides the legal clarity that will allow these funds to reach effective projects on the ground.

This moment represents a hard-fought victory for the diverse coalition of allies who have worked for years to make these creative conservation finance tools a reality. A key player in this process has been the Peru Ecosystem Services Project Incubator, a partnership between the Ministry of Environment of Peru and Forest Trends that was established in 2012 with sustained support from the Swiss Agency for Development and Cooperation and in partnership with CONDESAN and EcoDecision. The Incubator has been at the center of creating the enabling conditions for advancing the protection of ecosystem services in Peru by providing support for the public consultation process for the regulation, cross-sectoral coordination, and technical tools for the new law – all fundamental factors in securing yesterday’s achievement.