Fiscal policy reform for a Green Economy and NDC implementation: restoration and sustainable landscape management in El Salvador

Shortcomings in landscape management in El Salvador have aggravated the impacts of climate change. The country has included ambitious plans for landscape restoration in a package of measures intended to counter the resultant challenges. The project is helping the partner government to integrate existing government policies and incentives for the land use sector with national policies in the Ecosystems and Landscapes Restoration Program (PREP) as well as REDD+. A programme for government incentives to maintain and expand agroforestry systems is also being drafted, which will be deployed subsequently to implement PREP and the country’s forestry policy. To this end, the project is examining existing policy and incentive structures for the agricultural sector as well as PREP targets, identifying options for integration and developing action plans for their implementation. The project is also developing pilot measures for state-run incentive schemes aimed at maintaining and expanding agroforestry systems.

Project data

Countries: El Salvador
IKI funding: 800,000.00 €
Duration: 12/2018 till 09/2023
Status: completed
Implementing organisation: United Nations Environment Programme (UN Environment)
Political Partner: Environmental Sustainability and Vulnerability Cabinet

Ministry of Agriculture (MAG) - El Salvador

Ministry of Environment and Natural Resources (MARN) - El Salvador
Implementing Partner: Initiative of the Americas Fund (FIAES – Fondo de la Iniciativa para las Américas)

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State of implementation/results

UNEP, the Ministry of Environment (MARN) and the Environmental Investment Fund of El Salvador (FIAES) have completed the implementation of the Green Economy Incentives Project and the development of the three pilot projects.
As a result, a National Environmental Incentives Program was established as an environmental policy mechanism.
The three economic and financial incentive schemes for restoration of ecosystems and productive landscapes were piloted within one year: credit incentives, management incentives, and incentives for financing environmental services. They will now be implemented for another year with government funding as a follow-up and monitoring strategy.
The pilot projects were developed on a small scale using the concept of agro-productive ecosystems, with the vision of expanding to other areas and productive sectors of Salvadoran agriculture. The project benefited in its design from technical allies, such as the CATIE Tropical Agricultural Research and Higher Education Centre, the World Resource Institute (WRI), the Catholic Relief Service (CRS), and GIZ, which contributed to the development of financial instruments and tools.
The Ministry of Environment has demonstrated leadership by seeking to align public policies and incentives with national goals of ecosystem and landscape restoration, with the involvement of diverse partners. This has motivated land users to gradually transition to low-carbon agriculture and livestock production.
The project collaboration with FIAES enabled field visits during 06/ 2022 to 08/2023, which included the identification of key local and institutional stakeholders and the selection of participants and procedures. MARN, the main political partner, incorporated the incentive program into its environmental policy and developed guidelines to support the financial plans. It established a dedicated department to mobilize specific financial resources and develop new tools and methods to measure processes and impacts.
In the municipality of Apanea, Ahuachapán region, the pilot project "Credit Incentives" was developed by Banco Hipotecario, MARN and FIAES. Coffee producers agreed to implement soil and water restoration measures in their coffee forest ecosystems. A coffee agroforestry system (SAF - Coffee) was developed in five coffee farms (248 hectares), which prepared cultivation plans with basic information for the registration of flora and fauna, implemented soil and water conservation measures and participated in training on the production of organic fertiliser (they have now already produced 1,500 kilograms of organic fertiliser).
The pilot project "Payments for Environmental Services" was implemented on a total area of 41 hectares in Morazán with 13 farmers who can receive incentives for their restoration practices and ecosystem service production and use.

Latest Update:
12/2024