Ecological ICMS, payments for environmental services, and private reserves in the Paraná state (Brazil)

To protect the essential ecosystem services for the maintenance of society, effective mechanisms of incentive are necessary, acting supplementary to command and control instruments. The Ecological ICMS of Paraná State, Brazil, which was the first project of this kind in the country, showed effectiveness as a conservation incentive during its 30 years in operation and has the potential to enhance and increase the safety net of biodiversity in Paraná through municipal support to owners of Private Natural Heritage Reserves - RPPN. The aim of this study was to analyze the technical and legal feasibility of Payments for Environmental Services – PSA from municipalities to RPPN owners, using the Ecological ICMS as the main financial source. The Ecological ICMS in Paraná uses qualitative annual assessments, whose results highly affect the transfer of resources to the municipalities. Therefore, the programs to support RPPN owners tend to increase the tributary benefits of the municipalities. The average performance of RPPNs in Paraná was 27.5% in 2021, indicating an environmental and tributary underutilization of these areas. The PSA is the most attractive modality of incentive for RPPN owners since it generates financial benefits directly for them. However, because of specific norms, other modalities of municipal incentives are currently predominant, among which the most effective has been the inter-municipal agreements for conservation unit management. We suggest that the PSA model used in the Paraná State should be adapted to the municipalities using the Municipal Environment Fund, with resources from the Ecological ICMS. The inflow of resources from the private initiative, to comply with legal requirements and for marketing purposes, should also be observed. We suggest defining priority areas and specific environmental services so that these programs can converge with municipal policies for conservation and sustainable development.