Payments for Ecosystem Services opportunities for emerging Nature-based Solutions: Integrating Indigenous perspectives from Australia

With recent growing interest and potential investment in nature-based solutions (NbS), a local, regional and global level understanding of what kinds of mechanisms or arrangements work effectively to deliver the required biodiversity and climate change outcomes is essential. This paper presents the status and opportunities for Payment for Ecosystem Services (PES) arrangements in Australia, with a focus on Indigenous peoples in northern Australia. We reviewed 62 studies related to the distribution and extent of the predominant PES schemes globally and nationally in Australia, including different ecosystems (e.g. forest, water, savannas, etc.), spatial scale (e.g. local, regional or global), types of payment methods used for ecosystem services (ES) transactions, types of ES providers and beneficiaries, funders, users, and contract arrangements and related challenges. Globally, 54% of the studies were supported by government investment, 17% by private–public, and only 29% by private investment. 80% of studies focused on forests as the most common ecosystem for PES, with 61% of the PES arrangements implemented at a local scale, 16% at a catchment scale and the rest (23%) at a national scale. In 33% of the studies, a single ES is the focus for the system, i.e. water quality or carbon sequestration; in 37% of studies a bundled approach was followed where typically > 1–2 services are included as a bundle; and in another 7% stacked ES were included. Within Australia, six main schemes were considered to be PES, i.e. Conservation Agreements, Water trading (buyback) in the Murray Darling Basin, Reef Credits, Carbon Farming, the Queensland Land Restoration Fund, and the Indigenous Protected Areas and Caring for Country programmes on Indigenous lands. About 90% these programmes are funded by the Australian Government, focusing on carbon or biodiversity outcomes, with little consideration of Indigenous values. From an Indigenous perspective, a bottom-up PES approach incorporating the social and cultural aspirations of Indigenous people is preferred. Traditional management with low transaction costs, combining both socio-economic and environmental attributes as verifiable measures, can yield conservation as well as positive socio-economic outcomes for Indigenous communities in Australia and elsewhere. Empowering local communities, recognising and supporting their skills and knowledge, ensuring equitable and just distribution of funds, sustainable and reliable co-designed incentives are essential for the success of these fast-emerging opportunities.