The global status and trends of Payments for Ecosystem Services

Background

Payments for ecosystem services (PES) refers to the payments which are made for the benefits provided by natural systems, such as fresh water or air, in order to create incentives for landowners to preserve these natural systems. PES interventions exist across several domains such as water and forests, and may be financed by the users of ecosystem services, governments, or by agencies which have regulatory obligations to do so. There has been a substantial increase in PES interventions in recent years. The authors find that there are over 550 active programs across the world, and that, taken together, these programs make payments of over $36 billion each year.

Research Goals & Methods

The authors conducted a review of literature to map the range of PES mechanisms across the world and understand which factors support their growth. They identified the number of PES programs, their geographical spread, and their monetary value in the watershed, biodiversity and habitat, forest and land-use carbon domains.

Conclusions & Takeaways

They find that watershed PES interventions are among the largest in value and geographical spread, of the three domains. Chinese watershed PES interventions account for a large number of these programs, even as watershed PES interventions are gaining popularity in South America. Forest and land-use carbon PES interventions have also grown, even though supply remains greater than demand for voluntary forest carbon. Globally, there are fewer biodiversity PES interventions as compared to watershed and forest PES interventions.

According to their research, the following factors are required to scale up PES interventions globally: motivated buyers and sellers of ecosystem services, metrics to quantify the value of ecosystem services which are accurate as well as easy to assess, and PES managing institutions with low transaction costs.