Payments for ecosystem services: A review and comparison of developing and industrialized countries
TL;DR: In this article, the authors reviewed 457 articles obtained in a structured literature search in order to present an overview of the PES literature and identify the major foci of overall PES research.
Abstract: Payments for ecosystem services (PES) received a lot of academic attention in the past years. However, the concept remains loose and many different conservation approaches are published under the ‘PES label’. We reviewed 457 articles obtained in a structured literature search in order to present an overview of the PES literature. This paper (1) illustrates the different analytical perspectives on PES concepts and types, (2) shows the geographic focus of PES research and (3) identifies the major foci of the overall PES research. The paper finally (4) identifies differences and similarities in conservation programs and main research topics between developing and industrialized countries to (5) disclose potentials for research synergies, should research experiences in the two types of countries be exchanged more deliberately. We demonstrate that only few publications describe Coasean PES approaches. The majority of research refers to national governmental payment programs. The overall design of national PES programs in Latin America resembles the design of those in the US and EU considerably. Programs in the US and EU have been in place longer than most of the frequently published Latin American schemes. However the former are hardly considered in the international PES literature as research is usually published under different terminologies.
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University of Bonn1, University of Illinois at Urbana–Champaign2, Autonomous University of Barcelona3, Centre de coopération internationale en recherche agronomique pour le développement4, University of British Columbia5, Chalmers University of Technology6, Center for International Forestry Research7
TL;DR: In this paper, the authors adopt a theory-based approach to synthesize research on the effectiveness of payments for environmental services in achieving environmental objectives and socio-economic co-benefits in varying contexts.
311 citations
Cites background from "Payments for ecosystem services: A ..."
...…are not based on robust calculations of opportunity costs—or any other valuation approaches—and rather set through negotiations among participants Schomers and Matzdorf (2013) To illustrate the different analytical perspectives on PES concepts and types, the foci of PES research and to…...
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TL;DR: This meta-study systematizes 55 PES schemes worldwide in a quantitative database and finds additionality to be positively influenced by three theoretically recommended PES ‘best design’ features: spatial targeting, payment differentiation, and strong conditionality.
Abstract: Assessing global tendencies and impacts of conditional payments for environmental services (PES) programs is challenging because of their heterogeneity, and scarcity of comparative studies. This meta-study systematizes 55 PES schemes worldwide in a quantitative database. Using categorical principal component analysis to highlight clustering patterns, we reconfirm frequently hypothesized differences between public and private PES schemes, but also identify diverging patterns between commercial and non-commercial private PES vis-a-vis their service focus, area size, and market orientation. When do these PES schemes likely achieve significant environmental additionality? Using binary logistical regression, we find additionality to be positively influenced by three theoretically recommended PES ‘best design’ features: spatial targeting, payment differentiation, and strong conditionality, alongside some contextual controls (activity paid for and implementation time elapsed). Our results thus stress the preeminence of customized design over operational characteristics when assessing what determines the outcomes of PES implementation.
202 citations
Cites background from "Payments for ecosystem services: A ..."
...Finally, environmental additionality (vi) was clearly the most challenging variable, but also of great interest [40]....
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...made for avoiding projected damage, such as reducing deforestation) [40]....
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TL;DR: The findings show that most of the barriers to GI stem from cognitive limitations and socio-institutional arrangements, and suggest 33 policies that can both overcome these barriers and expedite implementation.
201 citations
TL;DR: In this paper, the authors analyse 40 PES cases in Latin America and provide insights that will inform policy and decision makers in designing future PES initiatives with higher chances of success.
Abstract: Market instruments such as Payment for Ecosystem Services (PES) emerged as a concept to compensate and encourage landowners to improve land management practices for the maintenance and provision of ecosystem services. Since the early 1990s hundreds of PES schemes have been implemented around the world with varying levels of success. The high investments required to implement such schemes, and the stakes involved, argue for an analysis of PES cases to determine factors that contribute to a particular outcome. The paper analyses 40 PES cases in Latin America providing insights that will inform policy and decision makers in designing future PES initiatives with higher chances of success. In this study we analyse each case using a set of criteria (related to ecosystem type, compensation package and incentives, spatial and temporal scales, institutional arrangements, and policy frameworks) to determine those most important for a particular outcome. These insights provide information on programme factors that contribute to the potential for success of a given PES scheme. Although this classification can be further improved, it provides a useful reference for decision-makers on what might be considered best practice on the ground concerning PES schemes.
200 citations
TL;DR: The impacts of various land uses on ecosystem services (ESs) occur in three ways: (1) major ESs are generated under different land use practices, (2) land use patterns have a significant impact on ESs, and (3) differing intensities of land use may have different impacts on the generation of ESs as mentioned in this paper.
Abstract: Ongoing population growth and economic development place increasing demands on the supply of services produced in and by ecosystems. The resulting degradation compromises their ability to continue supporting the provision of these services. As ecosystem services (ESs) are closely related to land use changes, studies linking these topics are critical in the context of better land use planning and to ensure the sustainable provision of ESs. The impacts of various land uses on ESs occur in three ways: (1) Major ESs are generated under different land use practices, (2) land use patterns have a significant impact on ESs, and (3) differing intensities of land use may have different impacts on the generation of ESs. As human needs for different ESs vary and are not always consistent, maximizing the use of one ES can lead to a sharp decline in other ESs that may exceed a threshold inducing irreversible change. Therefore, trade-offs between ESs have become challenges that the ecosystem planning and management community must address. Furthermore, other problems (such as a lack of reliable data, inconsistent evaluation methods, and a lack of validated results used in assessments of ESs) compound the difficulty of this challenge. The development of comprehensive assessment models that result from an integrated assessment and scenario analysis of ESs under different land uses can inform ecosystem management options. Studies of ESs under different types of land use change must enhance understanding of topics that link ecosystem processes with ESs. Recommended research includes enhancement of the management practices of soil and land, modeling and mapping the spatial flow of ESs, analyzing trade-offs and synergies between multiple ESs, and integrating and optimizing analyses of ESs. By understanding the ecological processes that drive ESs and how these are affected by land use change, we can establish a sustainable balance between multiple uses of different ESs.
150 citations
Cites background from "Payments for ecosystem services: A ..."
...…al. 2007; Trabucchi et al. 2012; Zhang et al. 2014), environmental decision-making and its implications (Daily et al. 2009; Bateman et al. 2013; von Stackelberg 2013; Zhen et al. 2014), and assessing payment options to account for ESs (Derissen and Latacz-Lohmann 2013; Schomers and Matzdorf 2013)....
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...2014), and assessing payment options to account for ESs (Derissen and Latacz-Lohmann 2013; Schomers and Matzdorf 2013)....
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References
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10 Oct 2016
TL;DR: In this paper, it is argued that the suggested courses of action are inappropriate, in that they lead to results which are not necessarily, or even usually, desirable, and therefore, it is recommended to exclude the factory from residential districts (and presumably from other areas in which the emission of smoke would have harmful effects on others).
Abstract: This paper is concerned with those actions of business firms which have harmful effects on others. The standard example is that of a factory the smoke from which has harmful effects on those occupying neighbouring properties. The economic analysis of such a situation has usually proceeded in terms of a divergence between the private and social product of the factory, in which economists have largely followed the treatment of Pigou in The Economics of Welfare. The conclusions to which this kind of analysis seems to have led most economists is that it would be desirable to make the owner of the factory liable for the damage caused to those injured by the smoke, or alternatively, to place a tax on the factory owner varying with the amount of smoke produced and equivalent in money terms to the damage it would cause, or finally, to exclude the factory from residential districts (and presumably from other areas in which the emission of smoke would have harmful effects on others). It is my contention that the suggested courses of action are inappropriate, in that they lead to results which are not necessarily, or even usually, desirable.
11,448 citations
"Payments for ecosystem services: A ..." refers background in this paper
...According to Coase (1960) there is no reason to assume that governmental intervention will perform better or produce more efficient outcomes than leaving the distribution of resources to the market....
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TL;DR: Payments for environmental services (PES) have attracted increasing interest as a mechanism to translate external, non-market values of the environment into real financial incentives for local actors to provide environmental services as mentioned in this paper.
2,130 citations
"Payments for ecosystem services: A ..." refers background in this paper
...…about the value of the service are directly involved, have a clear incentive to ensure that the mechanism is functioning well, can observe directly whether the service is being delivered, and have the ability to re-negotiate (or terminate) the agreement if needed’’ (Engel et al., 2008: 666)....
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...Within governmental PES schemes the state is considered as a ‘‘third party acting on behalf of service buyers’’ (Engel et al., 2008: 666)....
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...Engel et al. (2008) point that proponents of this approach emphasize positive effects on economic efficiency and environmental effectiveness as compared to Pigouvian ‘governmental’ approaches....
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...However, differentiating PES cases accordingly has been proposed frequently in the literature (Vatn, 2010; Engel et al., 2008)....
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...Private actors are assumed to ‘‘put in practice the Coase theorem’’ (Engel et al., 2008: 665), meaning that the problem of externalities can best be overcome through private negotiations between affected parties....
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04 Mar 2005
TL;DR: 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 as discussed by the authors, but many field practitioners and prospective service buyers and sellers remain skeptical about the concept.
Abstract: 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.
1,616 citations
"Payments for ecosystem services: A ..." refers methods in this paper
...Thus this program conflicts heavily with the voluntary criteria of Wunder’s PES definition (Wunder, 2005) and also with the ‘creation of incentives’ under the PES definition by Muradian et al. (2010)....
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...Thus this program conflicts heavily with the voluntary criteria of Wunder’s PES definition (Wunder, 2005) and also with the ‘creation of incentives’ under the PES definition by Muradian et al....
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TL;DR: This paper reviewed the historic development of the conceptualization of ecosystem services and examined critical landmarks in economic theory and practice with regard to the incorporation of ecosystem service into markets and payment schemes, concluding that the trend towards monetization and commodification of ecosystems is partly the result of a slow move from the original economic conception of nature's benefits as use values in Classical economics to their conceptualization in terms of exchange values in Neoclassical economics.
1,317 citations
"Payments for ecosystem services: A ..." refers methods in this paper
...The historical development of the ES concept and its incorporation into markets and payment schemes was depicted by Gomez-Baggethun et al. (2010)....
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TL;DR: In this article, the authors synthesize the information presented, according to case characteristics with respect to design, costs, environmental effectiveness, and other outcomes, and conclude that user-financed PES programs were better targeted, more closely tailored to local conditions and needs, had better monitoring and a greater willingness to enforce conditionality, and had far fewer confounding side objectives than government-funded programs.
1,157 citations
"Payments for ecosystem services: A ..." refers background in this paper
...Only one paper by Wunder et al. (2008) compared selected case studies of governmental AEPs in the US and EU with PES case studies in developing countries....
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...Wunder et al. (2008) argue that the program is complex and goes far beyond simple market transactions....
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