In this chapter, we have explored a bottom-up approach to generating environmental income by the poor. We have emphasized that better ecosystem management and a realignment of local resource governance to empower the poor can lead to significant increases in their household incomes. It is a strategy grounded in the belief that rural poverty reduction can begin with nature—the resource and employment base that already supports rural livelihoods.

At the same time, we realize that poverty reduction depends on many factors beyond our discussion in this chapter. For example, we have emphasized that good ecosystem management combined with effective commercialization of nature-based products helps reduce income risks for low-income families. But poor families face risks other than inadequate or uneven income, such as the risk of catastrophic loss from natural disasters or health shocks. Without mitigating these risks as well—through interventions such as crop insurance and access to better health care—the poor will not find a stable economic foundation in spite of good stewardship of their ecosystem assets.

Likewise, access to technology is another important factor we have only lightly touched on. Many examples show that innovations in technology and management practices have the potential to increase environmental income substantially, but there are considerable barriers to adoption of such innovations. For example, researchers in Brazil have found that a combination of planting legumes to enrich pasture soils and using solar-powered electric fences to better control where cattle graze on a given pasture could allow smallholders to sustainably double milk production and triple the carrying capacity of their land, bringing a marked increase in profits. But lack of credit and training, distance from markets, and lack of political commitment to extension programs means that few Brazilian farmers are likely to benefit from these innovations. Under the present economic incentives, poor farmers are likely to continue with their usual practices (Chater 2003:3).

This brings up the larger point that rural enterprises, although they may be physically remote, are connected to the national economy—and increasingly to the global economy— and therefore subject to macroeconomic and governance policies originating far from the village level. (See Box 4.5 Globalization, Governance, And Poverty.) Without pro-poor policy changes at these higher levels, the ability of the poor to deploy their ecosystem resources for greater income will be greatly attenuated. For example, national fisheries ministries typically concentrate their attention and budgets on industrial fisheries, ignoring the small-scale fisheries that the poor rely on. Without changing this dynamic, the poor will find their attempts at better ecosystem management frustrated by official inattention. Likewise, without high-level action to make credit and other financial services available for small rural enterprises, the poor will find it hard to capitalize on their governance and management successes.

On the other hand, this chapter shows that governments can create a foundation for greater environmental income by providing incentives for nature-based enterprises, empowering the poor by granting legally binding resource rights, and fostering responsive local institutions. In fact, as the case studies in Chapter 5 show, a high-level political commitment to expanding environmental income through local empowerment is crucial to scaling up village-level successes. When this happens, region-wide improvements in management practice and governance can occur that provide the poor a first step in economic advancement.