Perspective No. 7 - Payments for environmental services and development: Combining conservation incentives with investment

04/02/2011 - Article

What is a payment for environmental services (PES)? How can we determine the correct amount? Particularly in view of the thorny issue of avoided deforestation, the basis of the REDD (Reducing Emissions from Deforestation and forest Degradation) mechanism, Alain Karsenty suggests that future PES serve to fund not only the opportunity cost of ecological efforts, but also the investments required to change farming practices. To reduce the "rebound effect" of a hoped-for increase in incomes among rural households (the additional income may be invested in environmentally destructive practices), payments can be made subject to conservation efforts agreed contractually by the partners in the PES.

Paying communities or producers to maintain water quality or biodiversity; encouraging farmers to adopt environmentally friendly practices; and paying developing countries not to deforest, hence reducing CO2 emissions: interest in payments for environmental services (PES) is growing worldwide.

However, past experience has shown that there are certain malfunctions associated with PES: the criterion used to determine the amount; the ways in which efficacy is assessed; uncertainty about how such payments are used, etc. Hence the proposal to combine direct incentives to protect ecosystems, especially forests, with the ecological intensification of agriculture and investment in land.

Payments for environmental services and development: Combining conservation incentives with investment
Alain Karsenty
Perspective No. 7
CIRAD 2011

Perspective sets out to suggest new lines of debate and action, backed up by research work, but does not claim to express CIRAD's official position on the topics covered.
This series of 4-page summaries presents novel ideas or policies on development issues of strategic importance for countries in the South: food security, land tenure, climate change, energy security, forest management, standards, etc.

Perspective is intended for decision-makers (public, private, associations, etc), but also for communicators–journalists, teachers, etc–and anyone capable of taking on board simply formulated ideas. It is published in English and French.