 Optimal design of pro-conservation incentivesEcological Economics, 2009, vol. 69, issue 1, 126-134 Abstract: Payments for environmental services (PES) schemes have become an increasingly accepted and popular mode for governmental and non-governmental agencies to use in addressing local and regional declines in ecosystem services. In PES schemes, payments can either be tied to indicators of actions for service provision or to indicators of the generated service itself. Performance payments are synonymous for this second group, i.e. payments are completely contingent on the procurement of an environmental good or service. Such a focus raises several practical issues during implementation. We review and translate key aspects of the economic theory of incentives into the context of performance payment schemes with special attention paid to two practical issues: risks outside the individual's control and distortion in the measurement of environmental services. Four different incentive payment approaches are presented and the effects of risk and distortion on optimal incentives are discussed. The investigation of each payment approach is accompanied by a discussion of examples from the field. Keywords: Optimal; incentive; contracts; Payments; for; environmental; services; Performance; incentives; Distortion (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:69:y:2009:i:1:p:126-134 Access Statistics for this article Ecological Economics is currently edited by C. J. Cleveland More articles in Ecological Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.