The global status and trends of Payments for Ecosystem Services

Background

Payments for Ecosystem Services (PES) have expanded significantly in recent decades. These schemes aim to internalize the positive externalities that natural systems generate. PES creates incentives for landholders to adopt behaviors that sustain ecosystem service provision and, in some cases, generates additional revenue streams for conservation. However, it captures only a small fraction of the total value that natural systems provide. Researchers face challenges in collecting comprehensive and reliable data on PES due to its relatively recent emergence and the diversity of practices across different geographic scales.

Goals and Methods

The paper provides an empirical assessment of PES mechanisms, including user-financed, government-financed, and compliance-based approaches, across the domains of water, biodiversity, and forest carbon worldwide. Drawing on data from the Ecosystem Marketplace, the authors analyze the growth of PES programs by examining their numbers, geographical distribution, and monetary value. This analysis aims to uncover the factors that drive their development and effectiveness.

Conclusions and Takeaways

The rapid expansion of PES as a major conservation policy tool stems from key mechanisms such as government-financed watershed PES, compliance-based biodiversity offsets, and REDD+ programs for forest carbon. Despite this growth, the effectiveness of PES programs remains uncertain due to insufficient rigorous evaluation and limited data. The authors identify four essential features for scaling up PES: motivated buyers and sellers, well-defined metrics for ecosystem service provision, and low-transaction-cost institutions to facilitate fund transfers. Although some PES mechanisms struggle to achieve broad reach due to these challenges, the authors highlight their value as a conservation strategy, especially in regions where weak governance or enforcement limits alternative approaches.