Payments for Ecosystem Services
Payments for Ecosystem Services
Payments for Ecosystem Services (PES), also called payments for environmental services, are conservation arrangements in which people, communities, landowners, farmers, governments or other resource managers receive financial or material incentives for maintaining, restoring or increasing ecological benefits. These benefits can include carbon storage, clean water, watershed protection, biodiversity, wildlife habitat, soil conservation, flood regulation, coastal protection and other ecosystem services.
The basic idea is to connect those who benefit from ecosystem services with those whose decisions determine whether those services are protected. A downstream water utility, for example, may help compensate upstream farmers for reducing erosion. Governments may pay forest owners to maintain tree cover, carbon markets may reward communities for storing carbon, or conservation organizations may pay landholders to protect wildlife habitat.
PES has consequently developed into a broad family of conservation-finance mechanisms rather than a single standardized policy. Some programs resemble voluntary contracts between buyers and sellers, while others are government-administered environmental programs, community agreements, ecological-compensation systems or combinations of markets and public policy.
Research from around the world shows that PES can contribute to conservation, but payments alone do not guarantee environmental success. Outcomes depend heavily on how programs are designed, where they operate, who participates, how benefits are distributed and whether conservation would have occurred without the payment.
How Payments for Ecosystem Services Work
A PES program normally begins by identifying an ecosystem service and the people or organizations capable of protecting or increasing it. Beneficiaries or funding institutions then compensate those providers for particular actions or environmental outcomes.
Common PES arrangements include payments for:
- maintaining or restoring forests;
- reducing deforestation and forest degradation;
- protecting watersheds and drinking-water sources;
- reducing erosion and sedimentation;
- storing or sequestering carbon;
- protecting biodiversity and wildlife habitat;
- maintaining wetlands, mangroves and seagrass;
- adopting agroforestry or sustainable agricultural practices;
- conserving soil;
- improving water quality;
- protecting coastal ecosystems; and
- maintaining ecological functions on private or community lands.
An important principle is conditionality: payments are ideally linked to agreed conservation actions or measurable environmental results. Programs may require landowners to maintain forest cover, establish trees, reduce grazing, restore degraded land or follow other management practices.
Another central issue is additionality. A payment produces additional conservation when it causes an environmental improvement that would probably not have happened without the program. Paying for forests that were never in danger of being cleared may transfer money to landowners without substantially changing environmental outcomes.
Program designers must therefore decide who should receive payments, how much participants should receive, what conditions should apply, how performance should be monitored and what happens if participants fail to comply.
Effectiveness and Program Design
Research on PES increasingly emphasizes that program design can be as important as the amount of money spent.
Effective targeting can concentrate payments on places where ecosystems face significant threats and where conservation can generate large environmental benefits. Differentiated payments can account for differences in landowner opportunity costs, ecological value or conservation potential rather than paying everyone the same amount.
Contracts can also vary in duration, monitoring requirements, technical assistance and the combination of monetary and non-monetary benefits offered to participants.
Several recurring questions are used to evaluate PES:
- Effectiveness — Did the program actually improve environmental conditions?
- Additionality — Did it produce conservation beyond what would otherwise have occurred?
- Efficiency — Were environmental benefits produced at a reasonable cost?
- Permanence — Do conservation gains continue after payments stop?
- Leakage — Does protecting one location merely shift environmental damage somewhere else?
- Equity — Are benefits, costs and decision-making opportunities distributed fairly?
- Participation — Can the people who manage or depend upon the ecosystem realistically enter the program?
- Monitoring — Can compliance and ecological outcomes be measured reliably?
Evidence across programs shows that PES can reduce deforestation, encourage restoration and change land-management behavior under some conditions. However, results differ considerably among programs and locations.
Payments may be less effective where monitoring is weak, land tenure is uncertain, institutions lack legitimacy or payments are too small to compensate participants for the costs of conservation.
Equity, Poverty and Community Governance
PES has frequently been promoted as a mechanism capable of producing both environmental protection and economic benefits for rural communities. Research shows that this outcome is possible but not automatic.
Poorer households may face barriers to participation if they lack formal land titles, sufficient land, information, administrative capacity or the resources required to adopt conservation practices before receiving compensation.
Distribution also matters. A program can produce measurable environmental improvements while concentrating financial benefits among larger landowners or politically influential groups.
Studies therefore distinguish several forms of equity. Distributional equity concerns who receives benefits and bears costs. Procedural equity concerns who participates in decisions. Recognition equity concerns whether programs respect different cultures, values, rights, knowledge systems and relationships with nature.
These concerns are especially important on Indigenous and communally governed lands. PES can provide resources for community conservation, but externally designed programs can also conflict with collective governance, customary tenure, reciprocity or Indigenous concepts of stewardship.
Research increasingly argues that Indigenous knowledge and cultural relationships with ecosystems should be incorporated into conservation finance rather than treating nature only as a collection of commodities with monetary prices.
Conservation Motivation and the Role of Money
One longstanding concern is that paying people to conserve nature could weaken environmental values by replacing moral, cultural or communal motivations with financial incentives.
Research on this issue produces a more complicated picture. Payments can sometimes change motivations, but they do not inevitably cause people to care less about conservation. Outcomes depend on how programs are presented, the institutions involved, relationships among participants and whether payments are perceived as fair.
Conservation may also involve motivations that cannot easily be represented by conventional market transactions, including responsibility, reciprocity, identity, community obligations and cultural relationships with land.
For this reason, many real-world PES programs operate as hybrids combining financial incentives with government policy, community institutions, customary practices and conservation values.
Costa Rica, Mexico and Latin America
Latin America has played a central role in the development of PES.
Costa Rica established one of the world's best-known national payment programs, compensating landowners for environmental services associated with forests. Research on the Costa Rican system has examined forest protection, financing, targeting, institutional performance, agroforestry, Indigenous territories and whether payments produce conservation beyond existing land-use trends.
Mexico developed large national programs supporting hydrological services and forest conservation. Studies have examined their effects on deforestation, forest fragmentation, poverty, community participation, targeting and contract design.
Elsewhere in Latin America, PES has been applied to watershed protection, forest conservation, carbon storage and rural development in countries including Bolivia, Ecuador, Colombia, Brazil, Panama and Peru.
Research from the Amazon illustrates both the possibilities and limits of the approach. Payments can support forest conservation, but success depends on land rights, local institutions, economic pressures and community governance. Programs imposed without sufficient understanding of Indigenous institutions can also produce social conflict or weaken existing systems of collective management.
Africa
African PES initiatives cover forests, watersheds, wildlife habitat, agriculture, carbon and rural livelihoods.
Uganda has been the location of influential experimental research examining whether cash payments to forest owners can reduce deforestation and whether conservation gains continue after payments end.
Tanzania has developed watershed and community-conservation initiatives linking upstream land management to downstream ecosystem benefits. Kenyan research includes watershed programs, forest restoration incentives, biodiversity conservation, agroforestry and comparisons between PES and other conservation tools such as land acquisition and conservation easements.
Projects and studies in Ethiopia, Rwanda, Mozambique, Malawi, Madagascar and Namibia illustrate additional approaches involving watershed restoration, carbon finance, agricultural conservation and new technologies.
African experience also demonstrates the importance of land tenure, participation, institutional capacity and livelihood benefits. Where people depend directly on forests, farms and watersheds, conservation incentives must generally operate alongside broader economic and community needs.
China and Other Asian Programs
China has developed extremely large ecosystem-compensation and land-conversion programs. Unlike the market-oriented model sometimes associated with PES, Chinese programs often feature substantial government direction.
Research has examined forest restoration, cropland conversion, watershed compensation, water purification, land-use change and payments between upstream and downstream jurisdictions. These programs demonstrate that PES can operate through state institutions as well as voluntary transactions.
Vietnam's Payment for Forest Environmental Services system similarly combines payments with strong government involvement. Studies describe it as a hybrid arrangement in which state institutions, land rights and local governance shape how environmental payments work in practice.
Cambodia, Nepal, India, Indonesia and other Asian countries have experimented with biodiversity, watershed, forest and agricultural PES. These cases highlight the importance of institutional capacity, benefit sharing, community participation and sustainable financing.
Watersheds, Agriculture and Working Landscapes
Watersheds are among the most common applications of PES because connections between ecosystem providers and beneficiaries can be relatively clear.
Upstream forests and farms can influence erosion, sedimentation, flood regulation and drinking-water quality downstream. Water utilities, businesses, governments or communities may therefore have an economic incentive to finance better upstream land management.
Agricultural PES can compensate farmers for agroforestry, soil conservation, reduced pollution, habitat protection or other practices that produce benefits beyond the farm itself.
Research emphasizes that farmers' willingness to participate depends not only on payment size but also on contract duration, technical assistance, transaction costs, risk, land rights and compatibility with existing livelihoods.
PES is therefore increasingly viewed as one tool for maintaining productive landscapes while also conserving ecological functions.
Marine, Mangrove and Blue-Carbon Payments
PES principles have expanded from terrestrial ecosystems into coastal and marine conservation.
Mangrove forests provide carbon storage, fisheries habitat, coastal protection and other services. Payments linked to these benefits can create financial incentives for communities to protect or restore mangroves.
Blue-carbon projects provide one potential financing mechanism by generating revenue from the carbon stored in coastal ecosystems. Community-based examples also show how conservation revenue can help support local development.
Similar approaches have been proposed for seagrass ecosystems and fisheries. Marine PES nevertheless faces many of the same challenges found on land, including uncertain property rights, monitoring difficulties, benefit sharing and institutional coordination.
Private Landowners, Businesses and Natural Capital
Private landowners can play an important role in supplying ecosystem services, particularly where important forests, habitat and watersheds exist outside protected areas.
Programs in the United States and elsewhere compensate landowners for habitat conservation, forest protection, restoration and other ecological benefits. Participation depends heavily on trust, administrative simplicity, outreach and whether incentives adequately compensate landowners.
Businesses can also finance PES when ecosystem degradation threatens water supplies, agricultural production, supply chains or other economic interests. Corporate environmental commitments and sustainability strategies provide additional sources of funding.
The growth of natural-capital approaches has expanded this discussion further by attempting to incorporate ecosystem benefits into economic and financial decision-making.
Criticisms and Limitations
PES remains controversial.
Critics argue that describing ecosystem relationships primarily through monetary values can encourage the commodification of nature and obscure political, cultural and social relationships.
Power differences can also complicate the idea that PES represents a simple voluntary exchange. Governments, corporations, conservation organizations, landowners and rural communities may have very different bargaining power.
Property rights are another fundamental issue. People who actively manage or depend upon ecosystems may not legally own the land and therefore may be excluded from payments.
Environmental uncertainty creates additional difficulties. Fires, storms, droughts and other external forces can alter ecosystem conditions even when participants fulfill their obligations.
Payments can also fail when they address only a small part of a larger environmental problem. Forest payments, for example, may produce local improvements while broader agricultural, infrastructure or economic pressures continue driving deforestation elsewhere.
PES is consequently better understood as one conservation policy instrument rather than a universal substitute for environmental regulation, protected areas, community management or public investment.
Emerging Approaches
Recent research is exploring ways to improve and expand PES.
These approaches include more precise targeting, differentiated payments, combinations of rewards and penalties, improved ecological monitoring, natural-capital institutions and integration with nature-based solutions.
Other innovations include community forestry financed through multiple PES programs, payments for flood-risk reduction, ecological compensation based on public willingness to pay, corporate ecosystem-service finance and digital systems intended to improve transparency and benefit distribution.
Researchers are also paying greater attention to property rights, conservation motivation, Indigenous governance and the labor required to maintain ecosystems.
The emerging direction is therefore broader than simply creating markets for nature. PES increasingly sits within a larger field of biodiversity finance combining public policy, community governance, environmental economics, private finance and ecological science.
Conclusion
Payments for Ecosystem Services attempt to make the benefits supplied by healthy ecosystems visible within economic and policy decisions by rewarding people who protect or restore them. Decades of experience show that these payments can support forests, watersheds, biodiversity, agricultural landscapes and coastal ecosystems while providing income or resources to participating communities.
Their success, however, depends on much more than transferring money. Effective programs require appropriate targeting, credible monitoring, additional conservation, durable institutions, secure rights and payment structures suited to local ecological and economic conditions.
Social considerations are equally important. Programs that disregard poverty, community governance, Indigenous institutions, unequal bargaining power or existing conservation values can generate conflict even when their environmental objectives are well intentioned.
The accumulated research therefore presents PES neither as a guaranteed conservation solution nor as an inherently ineffective commercialization of nature. It is a flexible conservation-finance instrument whose results depend heavily on institutional design and local context. When combined with accountable governance, meaningful participation, ecological monitoring and fair benefit sharing, payments for ecosystem services can form an important part of broader efforts to finance biodiversity conservation and sustainable ecosystem management.
Global Reviews and State of PES Research
Reviews PES mechanisms across Maritime Southeast Asia, examining whether programs deliver promised ecological, economic, and social outcomes.
Examines both the potential benefits of PES and risks involving weak additionality, inequity, institutional complexity, and unintended ecological consequences.
Reviews hundreds of studies to assess how PES program design, implementation, and outcomes interact with environmental, economic, and social sustainability.
Analyzes more than a thousand PES publications and questions dominant assumptions about success, knowledge production, values, and political context.
Reviews the development of PES research and the institutional, ecological, and socioeconomic factors affecting program performance.
Synthesizes evidence on PES effectiveness, conditionality, targeting, additionality, permanence, leakage, equity, and future policy opportunities.
Maps the worldwide expansion of PES and documents the scale and diversity of watershed, biodiversity, forest, and other ecosystem-service payment mechanisms.
Definitions, Concepts, Institutions and Political Economy
Reviews evidence linking land tenure and property rights with participation, permanence, additionality, equity, and overall PES effectiveness.
Reviews arguments for varying PES payment levels according to opportunity costs, ecological benefits, social objectives, or other participant characteristics.
Reviews governance systems for forest ecosystem services, including PES, markets, regulation, community institutions, valuation, and collaborative management.
Explains how real-world PES programs frequently diverge from idealized market models and identifies practical principles for effective implementation.
Treats PES as political projects and examines how power, intermediaries, values, and decisions shape what qualifies as an ecosystem service.
Compares PES programs worldwide to identify recurring implementation patterns involving conditionality, intermediaries, transaction types, and institutional structures.
Examines the difficulties involved in determining causal environmental and socioeconomic effects of PES programs using credible counterfactual evaluations.
Provides detailed guidance on targeting, payment differentiation, conditionality, monitoring, transaction costs, participation, and other PES design choices.
Updates the influential PES definition and emphasizes voluntary transactions, service users, service providers, agreed management rules, and conditionality.
Uses a social-ecological systems framework to integrate economic, institutional, political, ecological, and behavioral perspectives on PES.
Reviews competing PES definitions and proposes a broader conceptualization that better accommodates the diversity of actual environmental payment schemes.
Provides an accessible overview of PES origins, definitions, design processes, program types, and innovations in practical implementation.
Examines where PES fits within the broader conservation-policy toolbox and the conditions required for incentive payments to produce additional environmental benefits.
Compares PES implementation across developing and industrialized countries, highlighting differences in institutions, financing, objectives, and policy context.
Warns against presenting PES automatically as win-win solutions and stresses that successful programs depend strongly on governance and socioeconomic context.
Redefining payments for environmental services | Luca Tacconi | Ecological Economics | 2012
Reconsiders how PES should be defined so that institutional arrangements, environmental outcomes, payments, and participant relationships are represented more accurately.
Develops an institutional approach to PES that moves beyond narrow market-exchange models and emphasizes social relations and governance.
Considers how PES principles might operate across different spatial scales while recognizing ecological limits and the characteristics of public ecosystem services.
Critiques the commodification of ecosystem services and examines how monetary valuation can obscure social relationships and ecological complexity.
Examines trade-offs and complementarities between economic efficiency and distributive fairness in PES program design.
Shows how property rights, transaction costs, motivations, community institutions, and governance structures influence the form and outcomes of PES.
Proposes a framework emphasizing realistic incentive structures, conditionality, additionality, permanence, leakage, and livelihood impacts.
Reviews fundamental PES design questions involving service definition, providers, buyers, targeting, payment levels, monitoring, enforcement, and institutional arrangements.
Effectiveness, Incentives, Contracts and Evaluation
Synthesizes experimental evidence on whether conservation payments crowd out, reinforce, or leave unchanged participants' intrinsic motivations for environmental stewardship.
Demonstrates how redesigning payment levels and targeting can obtain substantially more conservation from a limited PES budget.
Examines the relative effectiveness of rewarding ecosystem-service provision versus penalizing failure to meet environmental requirements.
Provides long-term experimental evidence on whether external conservation payments weaken or reinforce participants' intrinsic pro-environmental behavior.
Uses a choice experiment to estimate how much residents are willing to contribute toward improvements in different ecosystem services.
Investigates whether conservation behavior persists when payments become uncertain or disappear, addressing the durability of PES-induced behavioral change.
Reviews how payment levels, eligibility, targeting, transaction costs, land tenure, and household characteristics influence participation in PES programs.
Uses experimental evidence to examine whether conditional payments can improve collective conservation of shared forest resources.
Synthesizes empirical evidence on whether PES changes land-use behavior and improves environmental outcomes under different program designs and contexts.
Uses institutional analysis to show how PES interacts with regulation, property rights, collective governance, and other conservation instruments.
Argues that PES should be designed around local social, cultural, environmental, and institutional circumstances rather than standardized market models.
Evaluates a PES experiment using the three policy criteria of environmental effectiveness, cost efficiency, and social equity.
Identifies ecological, economic, institutional, and behavioral conditions under which conditional conservation payments are most likely to be effective.
The Future of Payments for Environmental Services | Paul J. Ferraro | Conservation Biology | 2011
Calls for stronger causal evaluation, experimental policy design, better targeting, and closer integration of economics with conservation science.
Reviews empirical evidence and stresses the need to distinguish payments, enrollment, changed behavior, and actual additional ecosystem-service provision.
Applies lessons from incentive-based environmental policy to PES, including targeting, payment levels, contract design, and unintended behavioral responses.
Shows how hidden information about landowner costs can affect PES contracts and considers mechanisms for improving cost-effective targeting.
Equity, Poverty, Motivation, Power and Community Governance
Assesses whether PES strengthens or weakens intrinsic and extrinsic conservation motivations across different institutional and cultural contexts.
Argues that PES and nature-based solutions should recognize Indigenous knowledge, cultural values, governance systems, and stewardship rather than limiting compensation to biophysical services.
Investigates how practitioners understand procedural, distributional, and recognition-based dimensions of equity in PES implementation.
Shows that many PES programs operate through state institutions, collective action, development goals, and social relationships rather than conventional markets.
Synthesizes evidence on income, assets, livelihoods, and welfare to determine whether PES generally benefits participating rural households.
Explores business models through which Indigenous land managers can receive income for cultural, ecological, carbon, biodiversity, and other stewardship services.
Critiques narrow market framings of PES while identifying ways incentive programs could recognize plural values and support broader sustainability transformations.
Explores whether digital financial systems can reduce transaction costs, improve transparency, and deliver environmental payments more directly to rural participants.
Warns that PES contracts can fail when external ecological forces beyond providers' control affect measured ecosystem-service outcomes.
Uses the concept of gift exchange to challenge purely monetary interpretations of conservation and highlight reciprocity, responsibility, and environmental care.
Critiques international PES governance by examining ownership, knowledge, institutions, bargaining power, and distribution of benefits.
Examines when economic incentives can correct the undersupply of ecosystem services and when institutions or nonfinancial approaches may be more appropriate.
Uses Rwanda's Nyungwe National Park to explore interactions among conservation effectiveness, legitimacy, fairness, participation, and equitable benefit distribution.
Develops criteria for deciding when conditional payments are likely to work better than regulation, collective management, or other environmental policy instruments.
Studies whether poorer households can enter and benefit from a PES program promoting environmentally beneficial silvopastoral land-management practices.
Examines access, decision-making, benefit distribution, property rights, and power in forest-carbon and watershed-service schemes in Meso-America.
Examines whether PES can simultaneously conserve ecosystems and improve poor households' welfare, including potential barriers to participation.
Costa Rica, Mexico and Central America
Examines how communities in Amanalco combine multiple PES programs with community forestry and how payments interact with local forest-management institutions and livelihoods.
Reviews two decades of Mexican PES research and implementation, identifying achievements, persistent gaps, and differences between academic evidence and policy practice.
Proposes a next-generation approach to PES in Costa Rica centered on natural capital accounting, institutional innovation, and long-term ecosystem stewardship.
Applies modern impact-evaluation methods to estimate how participation in Costa Rica's national PES program affected deforestation.
Examines how communities respond when governments change eligibility, targeting, conservation requirements, or benefit-distribution rules in PES programs.
Studies interactions between conservation payments and social cash-transfer programs and their combined effects on rural households.
Finds that Mexico's PES program can improve landscape connectivity by reducing fragmentation in addition to limiting outright forest loss.
Shows that participants value contract characteristics beyond payment size, including technical support, contract duration, and implementation arrangements.
Examines how rural participants perceive PES benefits, shortcomings, institutional relationships, and effects on community conservation practices.
Evaluates both forest-cover and household-welfare effects of Mexico's national PES program using rejected applicants as a comparison group.
Investigates landowner preferences for PES and demonstrates how contract conditions can substantially alter willingness to participate.
Examines PES implementation and benefits in Indigenous territories, highlighting questions of participation, institutions, culture, and benefit distribution.
Reviews two decades of Costa Rican experience with PES governance, finance, targeting, ecosystem outcomes, social impacts, and changing policy priorities.
Examines how payments, technical assistance, and farmer information networks influenced adoption of ecosystem-friendly silvopastoral practices in Costa Rica.
Finds conservation effects while examining whether avoided clearing on enrolled land can shift deforestation to other properties or locations.
Evaluates institutional performance and governance arrangements underlying the implementation of Costa Rica's environmental-service payment system.
Uses farm-level counterfactual analysis to estimate the effect of PES participation on forest-cover outcomes in Costa Rica.
Assesses how PES-supported agroforestry affected small farms, conservation behavior, livelihoods, and environmental-service provision in southern Costa Rica.
Payments for environmental services in Costa Rica | Stefano Pagiola | Ecological Economics | 2008
Reviews the origins, financing, targeting, implementation, and environmental and socioeconomic performance of Costa Rica's pioneering national PES program.
Describes the creation and early operation of Mexico's national payments for hydrological environmental services program.
Examines whether Costa Rica's nationally celebrated PES system produced additional forest conservation beyond changes already occurring in land use.
Andes, Amazon and Wider Latin America
Critically examines how international PES projects value forest conservation while often undervaluing the labor and social relationships required to maintain forests.
Identifies the social, institutional, economic, and ecological conditions that determine whether Amazonian PES actually produces forest conservation.
Shows how externally designed PES can conflict with Indigenous governance, collective authority, reciprocity, and established approaches to managing territory.
Examines how frontline workers translate PES policy into practice and mediate relationships between conservation institutions and Amazonian communities.
Evaluates the Water and Forest Producers project near Rio de Janeiro and estimates the additional forest cover attributable to PES participation.
Evaluates Brazilian Atlantic Forest PES programs and finds positive conservation effects while emphasizing that payments alone cannot overcome broader deforestation pressures.
Compares forty Latin American PES cases to identify social, economic, institutional, and environmental characteristics associated with stronger program performance.
Compares watershed-service payment arrangements to identify institutional conditions that support their durability after initial establishment.
Studies whether conservation practices encouraged through PES persist and how participating farmers understand and adapt to incentive-based conservation.
Examines an innovative Bolivian scheme using in-kind incentives to purchase watershed protection and migratory-bird habitat conservation simultaneously.
Compares Ecuadorian watershed and carbon schemes and highlights conditionality, additionality, leakage, welfare effects, and decentralized implementation.
Draws lessons from Caribbean efforts to use economic incentives and payments to improve watershed management and environmental-service provision.
Examines opportunities and difficulties involved in constructing locally appropriate watershed-service payment mechanisms in Bolivia.
Africa
Describes Rwanda's assessment of PES as a potential financing mechanism for restoring watersheds and rewarding communities providing ecosystem services.
Examines whether compensation for ecosystem services can align watershed restoration with local livelihood needs in Ethiopia's Koga watershed.
Describes institutional coordination supporting catchment restoration and financing approaches such as PES within Rwanda's water-resource management system.
Describes development of a catchment-level PES mechanism connecting improved upstream land management with water-resource benefits.
Reviews East African PES cases and analyzes opportunities, institutional limitations, financing, rural benefits, and requirements for successful implementation.
Revisits a Ugandan forest PES project and examines whether conservation practices and forest gains persist after payments terminate.
Explores PES, water-user finance, public funding, and other mechanisms for supporting long-term watershed restoration and nature-based solutions in Ethiopia.
Examines whether livelihood improvements associated with Tanzania's Uluguru PES initiative persist beyond the program's direct implementation period.
Discusses natural-capital investment and conservation-finance approaches, including mechanisms that reward ecosystem protection and restoration.
Investigates the socioeconomic and institutional factors influencing household participation in Kenya's forest restoration and livelihood incentive program.
Tests the potential and limitations of linking remote environmental monitoring with blockchain-based conservation performance payments in Namibia.
Willingness to Pay for Watershed Management | S. T. Abebe et al. | Resources | 2019
Estimates household willingness to financially support watershed restoration and identifies socioeconomic factors influencing demand for ecosystem-service improvements.
Estimates the compensation Ethiopian farmers would require to adopt climate-smart agroforestry practices providing broader ecosystem services.
Explores payments from downstream beneficiaries to farmers for conservation agriculture capable of reducing erosion and protecting Malawi's hydropower infrastructure.
Assesses whether compensating smallholders for agroforestry can provide ecosystem services cost-effectively while supporting rural livelihoods.
Reports a randomized evaluation of cash payments to Ugandan forest owners designed to reduce deforestation and forest degradation.
Compares the long-term cost effectiveness of PES with direct land purchases or conservation easements for biodiversity conservation in central Kenya.
Estimates compensation required by upstream farmers to adopt land-management practices that improve downstream water quality and watershed services.
Examines how payment design must account for situations where households using forests do not hold formal ownership rights.
Compares alternative payment structures for encouraging Tanzanian landholders to conserve forests and reduce deforestation.
Describes development of a watershed PES system connecting upland farmers with downstream water users in Tanzania's Uluguru Mountains.
Evaluates household income, consumption, forest dependence, agricultural production, and distributional effects of an agroforestry-carbon PES project in Mozambique.
Investigates spatial targeting of multiple ecosystem services to determine where bundled conservation payments could generate the greatest benefits.
Explores conservation payments as a way to strengthen local rights and community incentives for protecting wildlife habitat outside formal protected areas.
China and East Asia
Measures residents' willingness to finance watershed-forest services and examines how perceptions of multiple ecosystem benefits affect support for ecological compensation.
Develops a spatial approach for matching downstream demand for clean water with upstream provision of erosion-control and soil-retention services.
Estimates the economic value of forest water-purification services and explores market-based approaches for transferring payments from beneficiaries to providers.
Uses the Xin'an River Basin program to examine how PES ideas are translated and transformed within China's institutional and political context.
Evaluates a Chinese PES program simultaneously according to environmental effectiveness, economic efficiency, and distributional equity.
Evaluates ecological effectiveness and explores how spatial targeting could improve the allocation of incentives under China's land-conversion program.
Explores China's state-centered water eco-compensation system and contrasts it with conventional voluntary market-oriented PES models.
Uses spatial analysis to assess how a locally implemented PES policy influenced land-use change in rapidly urbanizing Suzhou.
Traces how PES alters household labor, migration, farming, and land use rather than assuming payments influence conservation through a single pathway.
Analyzes China's horizontal eco-compensation approach as a hybrid of government coordination and market-oriented environmental incentives.
Develops a PES framework for compensating regions that preserve cropland and its associated ecological and social services.
Examines whether ecosystem-service payments change farmers' incentives to cultivate or abandon marginal cropland.
Compares Chinese eco-compensation with international PES and examines the especially prominent role played by government in Chinese programs.
Reviews China's large government-led ecosystem payment and eco-compensation initiatives, their policy evolution, achievements, and implementation challenges.
Uses a Japanese biodiversity PES case to show how local institutions and unequal power relationships can reshape payment schemes after implementation.
Examines watershed eco-compensation pilots across China and the use of payments between upstream and downstream governments to improve water management.
Reviews China's Sloping Land Conversion Program and examines how institutions affect implementation, conservation outcomes, and participant incentives.
South and Southeast Asia
Examines whether downstream water users in Himalayan towns could sustainably finance upstream watershed conservation through PES.
Evaluates the feasibility of connecting upstream watershed conservation with payments from downstream users benefiting from improved water services.
Evaluates whether PES could encourage tree-based farming that reduces groundwater nitrate pollution while generating additional farm income.
Evaluates how Vietnam's forest environmental-service payments affect forest protection, household incentives, income, and local participation in Dak Lak.
Examines how Vietnam's national forest environmental-service payment policy differs from conventional PES theory and produces hybrid state-market arrangements.
Assesses institutional and financial opportunities for using PES to provide long-term funding for watershed conservation in Nepal.
Develops a community-centered PES model connecting upstream watershed managers with downstream beneficiaries in Nepal's Koshi region.
Discusses Vietnam's Payment for Forest Environmental Services program as part of broader efforts to green agriculture, forestry, and rural development.
Examines Vietnam's national PFES implementation in Hoa Binh and the interaction between formal program design, government objectives, and local institutions.
Compares conservation and livelihood effects of PES and protected areas in northern Cambodia using intervention villages and matched controls.
Reviews Nepalese PES-type schemes and identifies institutional, legal, coordination, benefit-sharing, and monitoring requirements for wider implementation.
Examines PES in agricultural and rural landscapes, including Asian cases, and connects ecosystem-service incentives with food production and food security.
Compares three Cambodian biodiversity-payment programs and examines whether performance-based conservation incentives can operate where formal institutions are weak.
Summarizes East Asian experience and practical lessons concerning PES design, stakeholder participation, governance, river basins, coastal systems, and sustainable financing.
Fair deals for watershed services in India | Chetan Agarwal et al. | IIED | 2007-10
Reviews efforts in Himachal Pradesh and Madhya Pradesh to establish payments for watershed protection while improving rural livelihoods.
Fair deals for watershed services in Indonesia | Munawir and Sonja Vermeulen | IIED | 2007-07
Documents attempts to develop watershed-service payments in the Brantas and Cidanau watersheds and draws practical lessons from action research.
Examines early Vietnamese experience and explains why state control, land rights, institutional arrangements, and limited voluntary transactions constrained PES development.
Marine, Mangrove, Seagrass and Fisheries PES
Explores PES as a mechanism for financing mangrove rehabilitation while creating incentives for local participation in coastal ecosystem management.
Examines Kenyan blue-economy conservation initiatives and the potential for carbon and ecosystem-service finance to support coastal communities.
Estimates compensation associated with mangrove ecosystem services and explores mechanisms for converting ecological benefits into conservation payments.
Examines how national policies, tenure arrangements, local institutions, and conservation organizations shape prospects for mangrove PES.
Reviews the community-managed Mikoko Pamoja project, where mangrove carbon revenues finance conservation and locally selected development projects.
Provides practical guidance for communities interested in financing seagrass conservation through payments linked to carbon, fisheries, water quality, and other ecosystem services.
Discusses community conservation finance, blue-carbon opportunities, governance, monitoring, and benefit sharing relevant to seagrass PES schemes.
Compares the costs and carbon benefits of protecting existing mangroves with restoring degraded mangrove ecosystems, informing blue-carbon payment strategies.
Examines property rights, community participation, institutional coordination, monitoring, and benefit-sharing challenges affecting mangrove PES.
Reviews how conditional incentives might be used to improve fishery management, protect habitats, and reward fishing communities for conservation.
Explores how carbon finance and broader ecosystem-service payments could provide communities with incentives to conserve threatened mangrove forests.
Watersheds, Agriculture, Private Lands and Business
Estimates stakeholder preferences for financing forest ecosystem services that reduce flood risks in Iran's Hyrcanian forests.
Reviews how PES can support expansion of agroforestry while identifying financing, governance, monitoring, equity, and institutional barriers to scaling.
Quantifies state-administered programs that financially reward private forest owners for conservation and ecosystem-service provision in the United States.
Reviews U.S. PES experience and lessons relevant to policymakers considering voluntary ecosystem-service markets and conservation-payment programs elsewhere.
Reviews opportunities for using PES around irrigation and drainage systems and compares experiences from Japan, the United States, and Tanzania.
Examines corporate-financed PES and how business interests, bargaining, sustainability goals, willingness to pay, and opportunity costs affect program structure.
Reassesses the famous Vittel watershed-payment case and questions conventional accounts of voluntary bargaining where large power differences exist.
Examines practical use of economic instruments, including ecosystem-service payments, within applied conservation projects and organizations.
Reviews ecosystem-service markets and incentive mechanisms in working rangelands while emphasizing institutional complexity and multiple ecological objectives.
Quantifies spending and participation in U.S. programs compensating forest owners for carbon, habitat, watershed, and other ecosystem services.
Identifies outreach, trust, incentives, administrative design, and collaboration strategies for attracting private landowners to conservation programs.
Examines why businesses finance ecosystem services and how PES intersects with corporate sustainability, stakeholder relationships, and philanthropy.
Investigates whether voluntary payments to private landowners can complement endangered-species regulation and identifies barriers to participation.
Natural capital market design | Various authors | Oxford Review of Economic Policy | 2019
Examines market architecture, property rights, metrics, verification, contracts, and institutional arrangements relevant to trading ecosystem and natural-capital services.
Reviews watershed PES mechanisms across China and other countries, focusing on compensation standards, negotiations, institutions, and implementation.
Considers how forest-carbon payments and REDD+ may generate incentives to conserve forests important for threatened primates.
Discusses ecosystem-service payments as a way to keep agricultural and forest landscapes economically productive while maintaining ecological functions.
Examines institutional and practical barriers to rewarding farmers for ecosystem services generated by trees within agricultural landscapes.
Highlights the importance of ecological feedback, monitoring, and adaptive management when linking financial payments to changing ecosystem conditions.
Provides an early global assessment of markets and payments for forest carbon, biodiversity, watershed protection, and landscape services, with particular attention to poverty.
Legal Frameworks, Policy, Finance and Practical Guidance
Tracks the expanding use of biodiversity-related economic instruments, including PES, taxes, fees, offsets, tradable permits, and positive incentives.
Provides a practical toolkit for designing conditional environmental transfers that combine ecosystem stewardship with poverty-reduction objectives.
State of Watershed Investment 2016 | Forest Trends Ecosystem Marketplace | Forest Trends | 2016
Surveys the global scale of financial transactions supporting watershed protection, restoration, sustainable agriculture, forests, and other forms of green infrastructure.
Explores international mechanisms through which beneficiaries could finance biodiversity and ecosystem services supplied by other countries and communities.
Provides practical guidance for identifying PES opportunities, finding participants, designing agreements, addressing legal issues, monitoring outcomes, and implementing schemes.
Sets out an economic framework for deciding when PES may be appropriate and identifies fundamental principles for designing viable schemes.
Reviews how targeting, differentiated payments, auctions, monitoring, conditionality, and institutional design can improve PES cost effectiveness for biodiversity conservation.
Reviews laws, property rights, contractual arrangements, governance institutions, and regulatory issues needed to establish PES systems.
Provides practical introductory guidance on identifying ecosystem services, potential buyers and sellers, contract structures, monitoring, and transactions.
Payments for Ecosystem Services | Gregory Valatin and Jenna Coull | Forest Research | 2008
Introduces PES concepts for forestry policy and reviews how beneficiaries of forest services might compensate land managers who provide them.
Develops policy recommendations for incorporating ecosystem-service payments into integrated river-basin and transboundary water management.
Provides practical guidance for creating payment arrangements between upstream watershed managers and downstream beneficiaries.
