Payments for environmental services: some nuts and bolts

By Sven Wunder. 2005

1,751 citations recorded by the source corpus.

Payments for environmental services (PES) are part of a new and more direct conservation paradigm, explicitly recognizing the need to bridge the interests of landowners and outsiders. Eloquent theoretical assessments have praised the absolute advantages of PES over traditional conservation approaches. Some pilot PES exist in the tropics, but many field practitioners and prospective service buyers and sellers remain skeptical about the concept. This paper aims to help demystify PES for non-economists, starting with a simple and coherent definition of the term. It then provides practical ‘how-to' hints for PES design. It considers the likely niche for PES in the portfolio of conservation approaches. This assessment is based on a literature review, combined with field observations from research in Latin America and Asia. It concludes that service users will continue to drive PES, but their willingness to pay will only rise if schemes can demonstrate clear additionality vis-a-vis carefully established baselines, if trust-building processes with service providers are sustained, and PES recipients' livelihood dynamics is better understood. PES best suits intermediate and/or projected threat scenarios, often in marginal lands with moderate conservation opportunity costs. People facing credible but medium-sized environmental degradation are more likely to become PES recipients than those living in relative harmony with Nature. The choice between PES cash and in-kind payments is highly context-dependent. Poor PES recipients are likely to gain from participation, though their access might be constrained and non-participating landless poor could lose out. PES is a highly promising conservation approach that can benefit buyers, sellers and improve the resource base, but it is unlikely to completely outstrip other conservation instruments.

Subfields: Economics and Econometrics, Global and Planetary Change, Management, Monitoring, Policy and Law

View Paper: https://www.semanticscholar.org/paper/cb7af6d716a66a73e75edf3eb6490085f790b32c

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Citations in the corpus

Economic valuation and the commodification of ecosystem services (2011, background): “Payments for Ecosystem Services (PES) have been defined as conditioned and voluntary transactions between at least one provider and one beneficiary, of well-defined ecosystem services (Wunder, 2005).”
Enhancing the sustainability of commodity supply chains in tropical forest and agricultural landscapes (2013, background): “Payments for environmental services (PES) are financial incentives that reward improved land-use and are a direct, conditional mechanism for conservation (Wunder, 2005).”
An operational model for mainstreaming ecosystem services for implementation (2008, background): “In the cases where markets exist for ecosystem services— for example, carbon sequestration, nature-based tourism, and water supply—institutions and organizations may need to be established to capture the values of these (52, 83).”
Developing incentives and economic mechanisms for in situ biodiversity conservation in agricultural landscapes (2007, background): “conditions, including the need: (i) to clarify the level of excludability and rivalry of such ES by beneficiaries and providers, (ii) of a sufficient demand or aggregate ‘willingness to pay’ for such services by the potential beneficiaries, (iii) to delineate and enforce property rights surrounding ”
Designing payments for environmental services in theory and practice: An overview of the issues (2008, methodology): “2 This section draws in part from Wunder (2005) and Pagiola and Platais (2007).”
The Devil in the Detail: A Practical Guide on Designing Payments for Environmental Services (2016, methodology): “Many authors argue that payments should be made only for activities that would not have been implemented in the absence of PES (Wunder, 2005).”
Policy instruments to enhance multi-functional forest management (2007, neutral): “Wunder (2005) provides a review of PES.”
Prosocial behavior and incentives: Evidence from field experiments in rural Mexico and Tanzania (2012, background): “The explicit assumption underlying PES is that offering sufficient payment will motivate users to adopt conservation practices (Ferraro and Kiss, 2002;Wunder, 2005);where contracts are collective there is an implied assumption that collective actionwill take care of itself.”