Since the early 1990s, countries in the South Asian region have been on high economic growth trajectories, but the expected improvements in human development levels have largely been non-commensurate in a number of well-being dimensions. Further, the environmental costs of such high and non-inclusive growth patterns continue to be largely unaccounted for in conventional development planning and resource allocation. The degradation of ecosystems is likely to be a significant barrier to the achievement of the Millennium Development Goals (MDGs) related to reduction of poverty, hunger and disease in the region. The report is structured around the multiple and varied links that characterize the relationship between human well-being and ecosystem services. Understanding these links is constrained by difficulties in conceptualising the underlying notions and large gaps in the scientific evidence base. This Situation Analysis feels assessment of ecosystem services at the landscape level is important because changes at this level may impact on goods and services in relation to existing structural habitat diversity and its vulnerability and resilience to changes resulting from both direct and indirect drivers. The analysis of poverty statistics for the region reveals that there are huge variations among countries in achieving poverty alleviation. Despite the declining trends, the magnitude of poverty remains large in all countries. Further, within countries there exist marked differences in the incidence of poverty by geographical regions. Studies from Bangladesh and Nepal indicate that the vulnerability of the poor is significantly increased by the loss of ecosystem regulating services. This Situation Analysis strongly emphasizes the need for updating and improving (better quantification) existing poverty maps in the South Asia region and aligning them with spatial information on the landscape domains of the poor. This may need to be done in a geographically selective manner but equally exhaustively with respect to ecosystems. Without these basic underpinning data sets, strategic policy development cannot be undertaken and will be piecemeal at best. Livelihood indicators are required to capture the wider (non-income) dimensions of poverty and more directly link livelihoods through to ecosystem services derived from the landscape. This needs to be done for the region as a whole, recognising indicators will differ depending on the dominant landscape features (ecosystems) on whose services the poor depend. The drivers of ecosystem change, both direct and indirect, and interact with each other and affect the ecosystem in a synergistic way. Among the direct drivers, climate change has important implications for human well-being in South Asia but there are key areas in which priority research needs have been found to exist. These are: ? Currently global and regional climate models provide regional monsoonal prediction with high uncertainty. There is a need to improve prediction of features (onset, duration ESPASSA Regional Situation Analysis breaks) of monsoonal rainfall on time scales relevant to the livelihoods of the poor (intraand inter-seasonal and decadal). Simultaneously, there is a need to examine existing coping strategies of the poor to the consequences of monsoonal variation to aid in the design of future adaptation and mitigation strategies. ? Continued glacial retreat and increased variation in the pattern of monsoonal rainfall as a result of climate change will result in major alterations to regional hydrology. The scale and magnitude of the impacts of these changes on regulating and sustaining services of ecosystems (for example erosion and flood control and cropping regions) requires investigation in context of poverty distribution. ? At the river basin and catchment scale, there is a need to evaluate different and competing demands for water and develop frameworks that aid decision making to protect and improve ecosystems services for poverty alleviation. ? Given the high concentration of poverty in agro-ecosystems, continued research focussing in particular on the provisioning and sustaining services underpinning natural resource management and crop diversification is essential. The seasonal patterns of dependence of the poor and their existing coping strategies require in depth evaluation in the whole region. ? Empirical research on forest vegetation characteristics and plant functional types, plant physiological parameters is required to improve model prediction of changes in forest extent, type and distribution in response to climate change scenarios. Changes in the flow of ecosystem services affect the well-being of the poor, directly or indirectly, through multiple pathways. Very few studies identify the complete ?impact pathways? from drivers to responses in dynamic settings. Case studies from the region reveal an asymmetry in the distribution of benefits (damages) from ecological conservation (degradation) between the rich and the poor. The rich benefit more than poor from ecological conservation while the poor suffer more damages than the rich from degradation. Emerging policy responses in the South Asia region recognize the importance of stakeholder involvement, market-based incentives, and participatory monitoring. Building on such initiatives requires capacity building in (a): developing and applying the tools for economic valuation of ecosystem services, (b) designing the right institutions and monitoring systems, and (c) understanding stakeholder roles and interactions.