Three Barriers to Effective Programs with Payment for Ecosystem Services: Behavioral Responses in a Computer-Based Experiment

Jacob P. Byl
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Jacob P. Byl: Department of Economics, Western Kentucky University, Bowling Green, KY 42101, USA

Sustainability, 2021, vol. 13, issue 22, 1-17

Abstract: Financial incentives in the form of payment for ecosystem services (PES) can encourage participation in voluntary conservation programs, but real-world experience with PES is limited for services such as the provision of endangered species habitats. A computer-based laboratory experiment with 139 US college students as subjects suggests there are three barriers to effective PES programs: (1) financial rewards can crowd out altruism—low-level PES in the experiment was less effective than the same program without PES; (2) landowners may assuage guilt over destroying habitats by making contributions to ineffective conservation programs—participants often paired destruction of habitat with token contributions to conservation efforts; and (3) landowners may strategically exit conservation agreements in ways that are detrimental to wildlife—a large proportion of participants chose to leave agreements and destroy habitats when the PESs were structured without credible deterrence of an early exit. Fortunately, the results of the experiment also suggest research to overcome these barriers by ensuring that PES financial incentives are scaled and structured to effectively promote conservation. The lessons from this study—though they issue from the particular context of this experiment—provide suggestions about how to structure benefit sharing schemes that could be used to promote conservation in a range of settings.

Keywords: payment for ecosystem services; voluntary conservation; financial incentives; experimental; empirical; law and economics; endangered species; habitat provision (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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