Payments for Ecosystem Services: Rife With Problems and Potential—For Transformation Towards Sustainability

Kai M.A. Chan, Emily Anderson, Mollie Chapman, Kristjan Jespersen and Paige Olmsted

Ecological Economics, 2017, vol. 140, issue C, 110-122

Abstract: Payments for ecosystem services (PES) programs are one prominent strategy to address economic externalities of resource extraction and commodity production, improving both social and ecological outcomes. But do PES and related incentive programs achieve that lofty goal? Along with considerable enthusiasm, PES has faced a wide range of substantial critiques. In this paper, we characterize seven major classes of concerns associated with common PES designs, and use these as inspiration to consider potential avenues for improvements in PES outcomes and uptake. The problems include (1) new externalities, (2) misplacement of rights and responsibilities, (3) crowding out existing motivations, (4) efficiency-equity tradeoffs, (5) monitoring costs, (6) limited applicability, and (7) top-down prescription/alienating agency. As currently practiced, many PES programs are thus of limited benefit and even potentially detrimental to sustainability. From this dire conclusion, we highlight several innovations that might be combined and extended in a novel approach to PES that may address all seven problems. Recognizing that PES necessarily articulate and even normalize values, our proposed approach entails designing these institutions intentionally to articulate rights and responsibilities conducive to sustainability—those we might collectively seek to entrench. Problems remain, and new ones may arise, but the proposed approach may offer a way to reimagine PES as a major social and economic tool for enabling sustainable relationships with nature, conserving and restoring ecosystems and their benefits for people now and in the future.

Keywords: Payments for ecosystem services; Reverse auctions; Incentive programs; Offsets; Corporate social responsibility; Market-based instruments; Motivational crowding out/in; Incentives and motivations; Stewardship; Environmental values; Relational values (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:140:y:2017:i:c:p:110-122

DOI: 10.1016/j.ecolecon.2017.04.029

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