Payments for Ecosystem Services

​Payments for Ecosystem Services (PES) dominate much of the international conservation policy research.  As I note in my book, the concept is popular in developing countries because of the weakness of the states in their ability to their limits resources and weakness of their control over their countries. The PES concepts can be implemented but they often involve private entities (e.g., international NGOs) that have the funds and staff lacking by developing countries. Theoretically, PES represent a voluntary agreement where some “buyer” (e.g., could be government or third party NGO, etc.) signs an agreement with a “provider” with the proviso that the provider will perform some environmental service for which they will be compensated.  A recent article titled “The political dimensions of Payments for Ecosystem Services (PES):  Cascade or stairway by Hausknost, Grima, and Singh in Ecological Economics” (vol. 131, 2017, 109-18) argues that PES schemes of necessity have “political dimensions” and that the involvement of providers may not be voluntary.  They also cite the fact that PES often attracts support from economists and conservatives because of its emphasis on use of market mechanisms, PES can and often do involve significant “transaction costs.” Indeed, in my book, I cite examples of  how complex and potentially hard to obtain “indicators” of provider services must be collected and used to determine if the provider has provided the promised services—if this monitoring is not done, then there is no assurance that the promised benefits materialize and PES may be worse than ineffective governmental services.  The authors cite two cases of successful use of PES—one of them concerns rubber tappers in Brazil and the Chico Mendes Law passed in 1999, the Acre state government established the Chico Mendes Law to provide subsidies for rubber tappers  The rubber tappers must be registered with the government and belong to regional associations which report to the government.  In this case, it is notable that it is the government doing the funding and this PES was established only after a social movement organized by Chico Mendes and others struggled against landowners with several rubber tappers including Chico Mendes murdered. Indeed, it was his murder and the involvement of international environmental organizations which helped to build momentum for the law.  For a brief discussion of the Chico Mendes law, see http://moderncms.ecosystemmarketplace.com/repository/moderncms_documents/rubber_tappers_final2.pdf 
In short, although the contract with payment mechanisms do represent partially market mechanisms, PES often involve heavy doses of politics.