Water-Related Payment Schemes for Forest Ecosystem Services in Selected Southeast European (SEE) Countries

This paper examines the level of payment for ecosystem services (PES) concept implementation in the financing of water-related forest ecosystem services (ES) in the Republic of Croatia, the Federation of Bosnia and Herzegovina (FB&H), the Republic of Slovenia, and the Republic of Serbia. The focus is on water-related forest ES recognised by the millennium ecosystem assessment (MEA). For the purpose of this paper, the term pure PES describes schemes that comply to all five conditions set by Wunder definition and term PES like for those schemes that miss some of those conditions. In the first step, the most important legislative documents related to forests, water, and environmental protection were selected. The second consists of a content analysis; focusing on the definition of ES; the definition of fees or payments; the establishment of ‘forest funds’, ‘water funds’, or ‘environmental funds’; and the way these funds were spent. Here we looked at the flow of funding into the forestry sector recognising forest management as the main water-related forest ES provider. Research revealed existence of well-established payments schemes in forestry in Croatia for almost 30 years and in FB&H for some 20 years which were assessed as closest to pure PES. In Serbia and Slovenia, there were no PES or PES like schemes in the forestry sector. In the water sector the well-established PES like payments schemes existing in all four countries. The environmental protection sector, however, rely more on the tax like rather than on the PES like schemes. Legislation in general recognised the link between forests and water, but this was much more evident in the forestry than in the water or environment sector. The role of the state is strongly pronounced in all countries studied, and was the main driving force behind all payments. However, this position of the state represents also the main obstacle for the development of pure PES schemes, together with underdeveloped private forestry and complex socio-economic conditions. Nevertheless, there is room for further development of pure PES and PES like schemes based on EU or global experiences.