Payments for ecosystem services and the fatal attraction of win-win solutions

Background

Payments for ecosystem services (PES) programs involve valuing and paying stewards of ecosystems for the services that these ecosystems create incentives for conserving them. These programs are sometimes characterized as ‘win-win’ solutions, with the potential to contribute to both biodiversity conservation and poverty reduction. The authors of this paper review the literature on PES programs and highlight some challenges of implementing them.

Conclusions & Takeaways

The authors argue that PES programs cannot be characterized as ‘market-based’ because socioecological systems are too complex to allow for the conditions that typically characterize markets, such as a large number of buyers and sellers, voluntary exchanges, and a high level of commoditization. Most ecosystem services are provided by public or common pool resources which makes their commoditization challenging. Secondly, they point out that the outcomes of PES programs can be determined by political forces and PES programs need not be the most cost-effective way to achieve environmental goals. Thirdly, giving monetary incentives for ecosystem conservation may erode intrinsic or other motivations. Finally, the authors suggest that in some contexts, the costs of paying for ecosystem services may be higher than alternative policies. They conclude by arguing that PES programs are one type of solution among a diverse set of policy solutions, and should be applied on the basis of the political, sociocultural, and institutional contexts within which they will operate.