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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.
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Chan et al., Re-Imagining PES
Payments for Ecosystem Services: Rife with Problems
and Potential—for Transformation towards Sustainability
Kai M. A. Chan a, Emily Anderson a, Mollie Chapman a, Kristjan Jespersen b, Paige Olmsted a
a Institute for Resources, Environment & Sustainability, 2202 Main Mall (4th floor), University of
British Columbia, Vancouver, B.C., Canada
b Center for Corporate Responsibility, Copenhagen Business School, Denmark
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 sustainabilitythose 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.
Extended 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
Chan et al., Re-Imagining PES
The challenge of sustainability and conserving biodiversity will require solutions that reign in the
negative externalities of market transactions. Climate change, habitat degradation and fragmentation,
pollution, overharvest, invasive species and diseaseall the major threats to biodiversity and
ecosystem services (Wilcove, 1998; Millennium Ecosystem Assessment, 2005)are produced largely
via extraction, conversion, transport, and use of goods and services traded in local or global markets.
The existing major tools for environmental policy and management all have encountered obstacles in
addressing these pervasive economic drivers. Legislative and regulatory ‘command and control’
approaches are difficult to implement, in part because those industries that stand to bear focused
costs are often highly effective as government lobbyists (Oreskes, 2004), and also because actions
must generally be demonstrated harmful before being prohibited. Such evidence of harm is often
elusive given that environmental patterns are inevitably cumulative products of diverse drivers of
change interacting over multiple spatial and temporal scales (Levin, 1992). Ecosystem-based
management (EBM) (Grumbine, 1997; McLeod & Leslie, 2009) suffers many of the same problems,
and it can be costly and difficult to implement given the need for coordination across sectors/agencies,
such that EBM as envisioned by experts has been only partly implemented in a few places (Arkema et
al., 2006; Chan et al., 2009). Finally, environmental impact assessment, potentially a tool for
preventing environmentally damaging development, has more often been a rubber-stamping
procedure that approves of all but the most egregious focused impacts (Boyd, 2003; Duinker, 2006;
Singh et al., submitted). A fourth kind of solution are environmental incentive programs, including
payments for ecosystem services (PES), which involve users of ecosystem services (ES) paying for
actions that protect those services (Wunder et al., 2008).
It was PES and similar private finance deals that drove the Economist to declare the ‘rescue’ of
environmentalism (The Economist, 2005), and such business interests continue to promote ES more
generally (WRI, 2008). If PES programs could succeed in internalizing the externalities of market
transactions, in theory Adam Smith’s invisible hand could steer global markets towards sustainability
rather than against it. Innovations to economic systems have tremendous potential for positive change
and are absolutely essential for sustainability (Daily & Ellison, 2002; Helm, 2015; Chan et al., in
However, although PES programs were initially met with considerable hope, they have also been
fraught with controversy, which appears to have thwarted their expansion. One outright rejection is
associated with the commodification of nature, and the concern with any market-based rationale to
protect ecosystems when it is the same market-based motivations that fuel the consumption that
drives environmental degradation (Kosoy & Corbera, 2010; McAfee & Shapiro, 2010; Spash, 2008).
Proponents as well as detractors within the ongoing commodification debate have become more
sensitized as well as cautious concerning the capacity, scope and overall ambition for PES initiatives
worldwide (Prudham, 2007; Gómez-Baggethun & Ruiz-Pérez, 2011; Gómez-Baggethun & Muradian,
2015). This is particularly evident in discussions around the ethical implications and social
consequences of introducing incentive programs into a community setting (Brooks et al., 2012; Luck et
al., 2012; McAfee & Shapiro, 2010; Norgaard, 2010). Despite such concerns, PES programs continue
to garner substantial interest worldwide, despite large-scale institutional failures of similar market
instruments, such as the inability to establish an internationally recognized and supported carbon
Chan et al., Re-Imagining PES
market (Dixon & Challies, 2015).
In this article, we address those practitioners and scholars who see some value in incentive-based
approaches to ecological problems but who may see shortcomings in their current contribution to a
more sustainable world. We take a somewhat unusual stance of pairing a diversity of fundamental
critiques with constructive proposals, assessing incentive programs and their potential contributions to
sustainabilityrealized or notfrom multiple perspectives. Specifically we bring to bear expertise in
environmental values, cultural ecosystem services, social-ecological systems and corporate social
responsibility; we also incorporate insights from sociology, social psychology, and anthropology. Most
writing on PES implicitly either accepts or rebukes the fundamental premises of economic efficiency
and monetary incentives as helpful towards sustainability, with PES proponents proposing design
changes to address particular flaws in PES programs as economic tools (e.g., Jack et al. 2008; Engle
2016; Rode et al. 2015). Others have offered important guidance for selecting among a broader set of
economic tools, in recognition of the limitations of PES (e.g., Lockie 2013; Rode et al. 2016), given
existing understandings of rights and responsibilities. These are important contributions.
This article takes a step back, explicitly considering the legitimacy and applicability of critiques while
acknowledging the merits of the overall process of incentivizing conservation and restoration. After
briefly defining the scope of incentive programs considered, we characterize seven major sets of
objections/critiques that have been levied at PES in a range of relevant literatures. We then consider
how several major design changes could lead to a novel redesign of PES as social and economic
tools, responding to emerging understandings of environmental values (e.g., Chan et al., 2016). In
particular, we engage explicitly with PES as institutions that articulate and affect responsibilities
potentially intentionally extending responsibilities beyond existing understandings. We draw from
existing approaches within and beyond PES to recommend a suite of conceptual shifts and
corresponding practical approaches to address each of the seven critiquesand to extend
stewardship responsibilities broadly in producer communities and across supply chains. We propose
that this approach might simultaneously address important challenges to PES and help the ES
concept live up to its highly touted potential.
PES, A Brief Introduction
In this article, we address a broad basket of incentive-driven programs and projects intended to
protect or provide sustainable flows of ecosystem services, commonly referred to as PES (Wunder,
2005, 2013; Muradian et al., 2010; Barrett et al., 2013), but also including a variety of related
programs (e.g., what Swallow et al. (2009) termed compensation and rewards for environmental
services). PES can refer to small local projects targeting specific species, such as the Wildlife
Conservation Society’s program that sold hunting permits for a rare turkey in Guatemala to fund
conservation of its habitat. They may also be substantially larger in both geographic and monetary
scale, such as Norway Environment Ministry’s $1 Billion USD investment to the Brazil Amazon Fund
to fund programs encouraging afforestation and reducing deforestation. PES programs can be private
arrangements, government driven, or some hybrid of the two. In Ecuador and elsewhere, water funds
are collaborations between municipal governments, environmental NGOs, private firms and local
water users. In these arrangements beneficiaries of clean water pay into a trust that funds watershed
restoration projects to enhance the quality and quantity of urban water delivery (Goldman et al., 2008).
PES have captured rapidly expanding attention. For instance, there were 13 articles in Google scholar
Chan et al., Re-Imagining PES
with the term “payments for ecosystem services” before 2000, 182 between 2001 and 2006, and 6830
between 2007 and 2015. This literature reveals mixed results with respect to endorsement of PES,
where synthesis is hampered by a lack of established metrics for success (Daniels et al., 2010; Dougill
et al., 2012; Prager et al., 2015). Learning across contexts has been challenging due to the wide
range of sectors, sizes and types of projects (see Brouwer et al., 2011; Engel et al., 2008). In short,
the promise of PES remains largely unproven (Kinzig et al., 2011; Naeem et al., 2015). And yet
optimism remains, from large funders and long-term government programs, and implementation
The expanding literature on PES has important gaps. The vast diversity of projects (based on services
targeted, spatial and temporal scales, kinds of participants, landscape types, and contractual
arrangements) makes it difficult to discuss PES as a unit, and yet many papers do just this. Broad-
brush arguments can impede progress, because appropriateness of program designs depends on
various dimensions of context (Wunder et al., 2008; Corbera et al., 2009; Kemkes et al., 2010; Brooks
et al., 2012; Muradian et al., 2013).
Several recent reviews have begun to address this gap by identifying important conditions and
contexts and which design features of PES are most appropriate for each (Jack et al., 2008; Lockie,
2013; Samii et al., 2014; Engel, 2016). In addition to these 'best practice' suggestions, ideas have
been put forth to improve our conceptualization of PES (e.g. Swallow et al. 2009). However, a
substantial gap remains between these constructive suggestions for improving PES programs and the
more fundamental critiques that have been levied against PES and market-based mechanisms more
generally (Kosoy & Corbera, 2010; McAfee & Shapiro, 2010; Spash, 2008). The following seven
critiquesordered for flow of ideas and not for importancedraw from and synthesize both the critical
and constructive literature on PES. While not an exhaustive set, we hope they constitute an important
starting point to advance cross-disciplinary conversations.
Seven Problems
1. New Externalities, “A cure for every ill, an ill for every cure”
The danger with any new market or system of incentives intended to address environmental
externalities is that it will itself yield actions with unintended consequences in the form of new
externalities. This is essentially a case of Goodhart’s Law, which states that once an indicator is made
a metric for success, it will cease to function as an effective metric because individuals and firms will
find and exploit loopholes that enable success by the metric without its intent (Newton, 2011). Several
authors have pointed to this general danger in the context of PES, as participants pursue funding from
the program without regard for other environmental concerns (Kosoy & Corbera, 2010; Luck et al.,
2012; van Hecken & Bastiaensen, 2010). For example, participants in carbon-credit programs may
produce low-cost carbon at the expense of food production and livelihood security, which emphasizes
possible perverse incentives by such environmental market interjections (Jack et al., 2009; Muradian
et al., 2010). The problem of new externalities is especially applicable to PES designs that award
contracts based on a small set of pre-identified criteria, and less applicable to designs that involve
scrutiny for multiple attributes (e.g., Stoneham et al., 2003).
The problem of new externalities often applies to reforestation or afforestation programs, wherein
plantations of fast growing (and often non-native) trees such as eucalyptus are commonly promoted
Chan et al., Re-Imagining PES
because their fast growth satisfies carbon sequestration goals, but also consume much water, cause
considerable soil loss and sedimentation, and may provide little habitat for biodiversity, even at
maturity (Farley et al., 2005; Jackson et al., 2005; Jindal et al., 2008; Bremer & Farley, 2010). Such
failures have been elaborated by Flores et al. (2009), who discuss the struggles of NGOs against the
Plantar Forestry Project in Brazil. Additionality requirements and narrowly targeted payments may also
lead to unintended environmental consequences (Flores et al., 2009; Bagri et al., 1999). Furthermore,
PES payments can, if unchecked, lead to further perverse incentives when those who do not qualify to
participate in a given program engage in undesirable activities, like deforestation, in order to be
eligible for the PES program (Sommerville et al., 2009; Wunder et al., 2008).
2. Misplaced rights and responsibilities, “Polluter is paid”
By providing payments for particular actions, incentive programs specify or imply a set of rights and
responsibilities that may change the way people perceive entitlements and appropriate actions. In the
ecosystem services literature, researchers have noted that PES might shift our understanding of our
rights and responsibilities towards ecosystems (Solazzo et al., 2015; Mauerhofer et al., 2013; Chan et
al., 2012). Most PES systems are structured such that beneficiaries of ES pay those directly
responsible for an ecosystem (“ES providers”) not to degrade (e.g., downstream water users pay
upstream farmers to reduce sedimentation and eutrophication of waterways). Such a structure sends
an implicit signal that people have the right to degrade unless paid not to do so (Polasky, 1997). In
short, the responsibility to care for or conserve the ecosystem and the services it provides is shifted
from those directly responsible for the ecosystem to those paying for the ES. Responses that include
the disappointment effect, loss aversion, and negative reciprocity can change how stewards and
benefactors of environmental services understand their rights and responsibilities towards ecosystems
(Fehr & Falk, 2002; Fehr & Gächter, 2001; Frey & Oberholzer-Gee, 1997). For example, ES providers
may be less likely to continue an action after an introduced financial incentive is removed because
they have learned to feel entitled to receive this compensation, and/or because they perceive that a
relationship has been violated. This problem is applicable to any program that funds would-be
polluters/degraders to refrain from polluting or degrading, particularly if payments only apply to those
who were previously polluting/degrading, as commonly required for additionality (hence “polluter is
paid” rather than “steward earns” as in Gómez-Baggethun & Ruiz-Pérez 2011); it applies less to
programs that fund active positive stewardship (e.g., encouragement to create new pollinator habitat
or nest sites).
There are many examples of changing perceptions of rights and responsibilities in response to
incentives, also associated with motivational crowding out (see 3 below; Gneezy & Rustichini, 2000;
Fehr & Falk, 2002). As an example of disappointment regarding PES, in a carbon project in Uganda,
participants who did not make required changes prior to monitoring were frustrated when payments
were not received or there was a delay in compensation, which undermined overall goodwill and trust
(Dougill et al., 2012). Similar effects may also occur on the consumer side of market-based
conservation programs. Igoe (2013) describes how participating in activities like purchasing products
with environmental certifications or acres of rainforest allows consumers to purchase their personal
“environmental redemption”, meaning that they may feel like they have fulfilled their environmental
responsibilities and do not need to participate in further conservation activities.
3. Motivational Crowding out, “Money breeds mercenaries”
Whereas we might hope that adding a monetary incentive simply adds to existing motivations for
Chan et al., Re-Imagining PES
conservation, there is also a danger that the new monetary incentive provided by PES programs can
undermine existing “intrinsic” or altruistic motivations. Much has been written describing this
motivational “crowding out” in the context of PES (Vatn, 2010; Luck et al., 2012; ). Considerable
evidence for this phenomenon has been found in experimental psychology (e.g. Frey & Oberholzer-
Gee, 1997; Reeson & Tisdell, 2008; van Noordwijk et al., 2012). Experiments confirm that participants
receiving only social incentives (no payment) often expend more effort than those receiving payments,
or than those offered both incentives (Heyman & Ariely, 2004). While most of the evidence to date
does not focus on conservation activities, there is evidence of motivational crowding out in PES
programs (Rode et al., 2015). Of particular concern is the fact that the displacement of intrinsic and
altruistic motivations may be difficult to reverse (i.e., after the removal of the monetary incentive)
(Gneezy & Rustichini, 2000). This problem applies to any program offering a payment, but it may be
less applicable when payments are co-payments or clearly lower than opportunity costs (because ES
providers must retain intrinsic motivations to justify participation (Kosoy et al., 2007)).
Although it has received less attention in the PES literature, motivational crowding out can have a
social dimension as well. Some stakeholders may undertake stewardship actions for stated ‘moral’
reasons partly to gain social approval or avoid social disapproval, or simply to conform to social norms
(Kerr et al., 2012). However, if people are paid for such actions (or see others getting paid for the
same action), the social incentive diminishes as it becomes hard to distinguish a moral motivation from
a mercenary one (Fehr & Falk, 2002). Similarly, Bowles (2008) suggests that policies designed for
self-interested citizens may undermine moral motivations. By focusing on economic arguments, we
may diminish the total number of motivations for conservation (Olmsted et al., in prep), a concern
because conservation efforts will likely be more successful with multiple arguments in their favour
(Redford & Adams, 2009). Wunder (2005) explains how strict additionality requirements can signal
that non-monetary motivations for conservation are not valued by excluding conservation-minded
people who may already be engaged in conservation activities for non-monetary reasons.
There is some evidence of motivational crowding-out from the PES literature. In experimental settings
with hypothetical farmers, Kits et al. (2014) observed small crowding-out effects via reduced
participation after removal of payments. Similarly, in their review of eighteen empirical studies Rode et
al. (2015) found evidence of motivational crowding out (and to a lesser degree, crowding in). More
recently, De Martino et al. (2015) paradoxically found that higher monetary awards induced less
participation of conservation-minded landowners in a hypothetical PES, suggesting a crowding-out
4. Project Efficiency and Equity, “What about me?”
There is an inherent tension between structuring a program to achieve maximal conservation gain for
the least money versus providing needed funds equitably across potential participants. Conservation
program efficiency is often sought via targeting participants who offer the greatest ‘additionality’
effectively the greatest conservation return on investment. Efficiency may also impede equity when
program designs unintentionally exacerbate barriers to participation for poorer landowners, including
land tenure and requirements to hire foresters to complete applications (Pagiola, 2008; Anderson &
Zerriffi, 2012). The tradeoff between these two desirable attributes appears to be applicable to all PES
The PES literature provides many examples of such tradeoffs. Programs may seek efficiency at the
cost of equity when they seek out the most ecologically important or most degraded land (Pascual et
Chan et al., Re-Imagining PES
al., 2010). Other common strategies to reduce PES program costs, such as requiring minimum
commitments of land or resources to participate, favour including fewer ES providers responsible for
larger parcels of land over many smaller-scale providers (Anderson & Zerriffi, 2012). In an attempt to
optimize multiple conservation goals in a PES in the Andes, researchers found substantial tradeoffs
between maximizing land enrolled and number of farmers participatingthe most cost-effective
conservation resulted in substantially uneven payments to participants (Narloch et al., 2011).
Targeting particular land for conservation or changing management practices yields better
(environmental) results than including land at random or maintaining existing practices (Narloch et al.,
2011; Pascual et al., 2010). However, this can exclude people in some areas and those who are
already engaging in conservation activities. PES programs that aim for highly efficient service
provision outcomes and ignore equity considerations may reinforce existing power structures as well
as inequalities in access to resources (Pascual et al., 2010); they may even undermine the
effectiveness of PES programs for conservation (Pascual et al., 2014). In Costa Rica’s national PES
program, despite the addition of explicit social goals and associated requirements to include less
wealthy and more vulnerable Costa Ricans, participants continued to be disproportionately wealthier,
more educated landowners (Porras et al., 2013). On the other hand, the PES program in Costa Rica
arguably also reduces its environmental efficiency while increasing equity by allocating 26% of its
funding to PES in indigenous territories where there is little risk of deforestation (Porras et al., 2013).
5. Burden of monitoring, “Cheating pays, so pay for policing”
If participants engage in a program primarily for monetary benefit, there is an unavoidable incentive for
ES providers to cut corners or shirk responsibilities, which has led to costly on-ground monitoring to
ensure that participants are doing as they should. While monitoring of overall impact is important to
understand the effectiveness of various programs, monitoring, and an often rigid accountability
framework consumes a large fraction of the costs of carbon credit payments (Wittman et al., 2015). In
addition to concerns about cheating, PES may require detailed monitoring for reports to funders or
beneficiaries or for accounting purposes (Wittman & Caron, 2009). More broadly, an overemphasis on
monitoring, auditing, and achievement of quantitative metrics can undermine organizational autonomy
and professional values, yielding several kinds of unintended effects (Shore & Wright, 2015). This
problem is applicable to any PES program involving payments, but much less so when the payments
are token (small relative to opportunity costs), in-kind, or reimbursements for expenses incurred, due
to the associated reduction in incentives or opportunities to cheat.
Particularly for carbon sequestration projects, which generally require detailed accounting, monitoring
costs have subtracted from other program goals. When an NGO in Guatemala adopted PES as a
mechanism to fund its reforestation work with small-scale farmers, several unanticipated
consequences occurred: funds were diverted from development activities to pay for costly outside
consultants with the needed technical skills for carbon accounting, and the NGO expanded from its
focus on small scale farmers to include those with larger land holdings (which eased the burden of
monitoring) (Wittman & Caron, 2009). Thus, burdensome monitoring not only presents costs but can
also function to exclude many small-holder farmers from participating, particularly when auditors are
paid by the farmer, as in Costa Rica’s national PES program.
6. Limited applicability, “A Coasean solution for a non-Coasean world”
PES are also limited as a solution to environmental problems because they are only applicable to
relatively rare cases (Wunder, 2013). Although Wunder points to several relevant requirements, much
Chan et al., Re-Imagining PES
can be summed up by recognizing that PESas ideally conceivedare effectively two-party
negotiation solutions in a world where two-party problems are rare. Here we refer to Coasean theory,
which posits that environmental externalities can be solved via the clarification of property rights,
which would allow affected parties (the impacted and the impacting) to negotiate with one another in a
free market system (Coase, 1960; Tietenberg, 2003; Harris, 2002; Russell, 2001; Hanley et al., 2001;
Perman et al., 2003). Coase argued that precise allocations of property rights and the absence of any
costs of information or negotiation would allow two parties to arrive at an advantageous outcome (Dixit
& Olson, 2000; Coase, 1960). Such negotiations should result in Pareto-optimal outcomes including
the human experience of environmental harms (Cheung, 1970; Coase, 1960).
The problem is that such solutions apply only to the few cases in which a given environmental
externality (e.g., water quality degradation) affects a single party or a cohesive set of parties. In cases
of multiple affected parties (e.g., firms and also human communities), the benefits of ES mitigation
actions often cannot be recouped by a sufficiently cohesive group that such private solutions will occur
spontaneously. In many PES, governments have stepped forward with a Pigouvian solution (Engel,
2016) distributing funds from the public purse to protect public benefits. Because this generally
requires large new sources of revenue (e.g., taxes), such government action does not often happen at
large scales. As such, the types of actors involved in PESand thus the sources of funds and the
scope for application of PESare often quite limited. This problem is not associated with any
particular application, but rather the paucity of applications in relation to the frequency of
environmental externalities.
In line with this argument, there has been relatively little corporate involvement in PES, despite a rise
in interest in environmental sustainability by manufacturers and retailers globally (Dauvergne & Lister,
2012). Considering the role that firms have played in impacting the environment, firm participation in
conservation is appropriate (Dixon & Challies, 2015). Yet firms face a high degree of risk and
uncertainty when entering new markets in the form of sustainable initiatives (Dixon & Challies, 2015).
In the case of PES, firms are often unfamiliar with the nexus of conservation, social development and
investment finance (Agrawal et al., 2011; Corbera & Schroeder, 2011; Dixon & Challies, 2015).
Limited private sector involvement may reflect the considerable costs and uncertainty associated with
PES, which can be magnified in the context of low governance capacity (Matthews et al., 2014;
Rendón-Thompson et al., 2013; Van Noordwijk et al., 2014; Hajjar, 2014). Recently, firms have
become more involved in PES through REDD+ activities, with firms comprising nearly 40% of
organizations engaged in preventative deforestation pilot projects globally (Gallemore and Munroe,
2013). While firms have been directly involved in PES advocacy networks, particularly in the case of
REDD+, they remain at the edge of the policy community discussion, with limited engagement at the
project level (Moeliono et al., 2014: Gallemore & Munore, 2013). Policymaker understanding of firm
participation in PES remains limited, including motivating drivers and investment behaviors (Levy &
Newell, 2005).
7. Top down prescription, “Agency knows best”
Many PES programs fund particular actions on a one-size-fits-all basis, which incurs the risk that
would-be participants might recoil from such prescriptions due to conflicts with their own values or
restrictions on their creativity and wisdom as stewards of the land. Dictated by regulators or third
parties, PES regulations may thus not fit with the values and practices of ES providers. Such outside
prescriptions are often far less attractive than home-grown solutions (e.g., the “follow the bright spots”
approach, Heath & Heath, 2010). This problem applies to any design that dictates narrowly the kinds
Chan et al., Re-Imagining PES
of actions that are eligible for payment, and it applies less to PES designs that invite suggestions for
actions (e.g., Stoneham et al., 2003).
Farmers and other landowners often resist inflexible prescriptions, which seem to conflict with their
values, and which deny their agency as effective stewards of the land (Chan et al, 2015). In one case,
'no touch' rules for a riparian buffer PES in the US Northwest conflicted with farmers' values to actively
manage and care for their land (Chan et al., 2015). In another PES project, farmer buy-in was
improved when it adapted to farmers’ language and culture, e.g., framing ES as a product that farmers
produce and a point of pride (Wynne-Jones, 2012). Farmers often prefer conservation actions that
visibly demonstrate success or productivitye.g., fences are preferred to overgrown buffers (Burton,
2004) (despite this, unmanaged buffers are a common feature of PES).
One reason for the conflict between ES providers and PES programs may derive from the values
articulated by these programs and conventional environmental conservation (Vatn, 2005; Olmsted et
al., in prep; Chapman et al., in prep). ES literature has generally focused on intrinsic and instrumental
values of nature, though the latest IPBES framework makes key steps towards acknowledging a
greater diversity of relationships between people and nature (Díaz et al., 2015; Chan et al., 2016).
Agrarian values, for example, are often centered around the relationships between farmers and the
land they work, so-called “relational values” that can also include instrumental and intrinsic
components (Carlisle, 2013; Smith, 2003; Chan et al., 2016).
Solving the problems
Although many PES programs are vulnerable to the above critiques, some are less vulnerable,
sometimes by accident. For example, Kosoy et al. (2007) show that many Central American farmers in
their sample participated in PES programs even though payments were lower than opportunity costs,
which indicates that the program is successfully ‘recruiting’ inherent motivations. Outside the PES
literature, Wilcove & Lee (2004) showed that many US landowners can forego opportunities for private
gain (specifically, regulatory relief associated with endangered species legislation) under programs
designed explicitly to foster trust and goodwill. Program participants who are investing considerable
time and effort without full compensation, might experience the avoidance of cognitive dissonance
(Cooper, 2007; Festinger, 1962). By this psychological process, those participating despite incurring
costs (i.e., being compensated less than their opportunity costs) are likely to subconsciously justify
their contributions (or foregone opportunities) as consistent with their stewardship values and/or
identities, thus reinforcing those values and identities. There is ample evidence of this effect from
psychology, e.g., homeowners told that they would be featured in a newspaper for their energy
conservation achievements subsequently reduced their energy consumption (Pallak et al., 1980).
Even more interestingly, the homeowners’ conservation efforts increased after (later) being told that
the newspaper could not run the articleapparently because the process had cemented their identity
as a conserver of energy (Pallak et al., 1980; Cialdini, 2007).
Perhaps PES could similarly crowd in existing motivations. One design that might facilitate this is the
reverse auction, which includes a competitive bidding process that encourages ES providers to bid
low, particularly when bids are closed (i.e., to have a greater chance of being funded) (Stoneham et
al., 2003). Such reverse auctions are like other PES except that instead of a one-size-fits-all
determination of payments for prescribed actions, participants propose both actions and requested
payments in their bids; bids are then chosen by the program administrator based on cost-effectiveness
(Vickerey, 1961; Ajayi et al., 2012; Bryan et al., 2016). Since it is now clear from the evidence of
Chan et al., Re-Imagining PES
motivational crowding out (Rode et al., 2015) that many landowners have intrinsic motivations for
stewardship actions, it seems quite likely that ES providers would undervalue their time in bids,
because the chosen actions are likely to be ones they wished to undertake anyway (e.g., clearing
invasive vegetation, or fencing to keep livestock from degrading streams, which might be ‘intrinsically’
desirable for both self- and other-oriented reasons). Ironically, Stoneham et al. (2003) assumed that
reverse auctions would reveal the costs of management, but in a context of intrinsic motivation, bids
are likely to understate the costs (which would help explain how in the Australian state of Victoria
achieved a cost-savings of approximately seven times, relative to a fixed-price payment) (Stoneham et
al., 2003). Underbidding ES providers would have the same crowding-in potential as noted above. An
analysis of real programs in Tasmania, Australia revealed that such programs benefited landowners
and also facilitated shifts in motivations and values (Zammit, 2013).
Such design features might be further leveraged to intentionally accomplish the value-change that is
likely essential for sustainability (Table 1; sections below). First, program communication could
explicitly label funding as awards for good stewardship. By explicitly naming desired values in this
way, and publicly recognizing individual actions and commitments, we can ‘grow’ leadership identities
and also encourage future behaviours consistent with those identities (Heath & Heath, 2010; Cialdini,
2007). Even tiny tweaks in program wording can apparently affect stated desirability of PES programs
(Clot et al., 2017). Second, by designating funding based on such identities as illustrated through past
actions, we might further enhance these steward-growing effects.
Many of the seven problems stem partly from what we might see as an unhealthy obsession with
individual-level additionality (Goldman-Benner et al., 2012). This obsession may stem from the logic
that PES, as with all subsidy programs, are vulnerable to cost inefficiencies via paying for actions that
ES providers would have undertaken even without the program. We would argue, however, that the
focus on each individual misses the point. In addition to equity, what matters is that the program as a
whole realizes conservation goals efficiently and that it sets the stage for future stewardship through
value consolidation and norm change. Cost-effectiveness at the scale of the project can be enhanced
by program designs that attract a large number of bids (thus incorporating many low-cost providers)
that leverage existing motivations (e.g., for payments less than the full opportunity costs), and which
crowd-in inherent motivations rather than crowding them out (thus securing future stewardship).
Chan et al., Re-Imagining PES
Table 1. Toolbox for a reimagined PES. Seven fundamental critiques levied at PES programs
(‘problems’) are paired with approaches to solutions, including both proposed conceptual shifts
and example design criteria (‘tools’) to enact those. Overarching shifts in program framing and
communication may complement the proposed design changes (e.g., payments as awards
rather than incentives). Appropriate tools will be highly context-dependent, but the hope is that
the proposed conceptual shifts will inspire practitioners to improve or develop new methods
and tools to address key sustainability challenges via PES.
Imagine a program designed as above. It would substitute fixed payments for ‘additional’ outcomes
with publicly conspicuous co-payment awards for sustained stewardship commitments, thus replacing
an implicit message of “If you do X, we’ll pay you $Y” with “Land stewardship leader: How can we help
you do even more?”. Imagine further that the program was funded not by beneficiaries of threatened
ES, but by the whole supply chain complicit in such impacts, including the retailers and consumers of
the goods whose production incurs impacts (more details below). In the admittedly aspirational section
below, we outline how such a conceptual shift could be realized via a suite of program design
features, which might address the seven categories of problems facing PES. While the proposals
below could work together synergistically, they could also be implemented separately as appropriate
for and effective in different contexts.
Chan et al., Re-Imagining PES
1. Reward Stewardship, Not Particular Actions [vs. New Externalities]
By rewarding stewardship instead of particular pre-defined actions or outputs, programs could close
the loopholes that inevitably arise with any fixed metric for payment, thus reducing the risk of new
externalities. By maintaining an adaptive evaluation process and rewarding patterns of behavior,
programs might escape Goodhart’s Law and encourage short-term and long-term stewardship
(Newton, 2011).
Some programs are already functioning as a public recognition for overall stewardshipif unofficially.
For example, more than a third of PES participants surveyed in the San Carlos region in Costa Rica
said that recognition as someone who cares for the environment was an important benefit they
received from participating in the program, and 68% reported both recognition and environmental
benefits, whereas only 53% mentioned economic benefits (Anderson et al. in prep). Similarly, Kosoy
found that many providers from a watershed PES in Central America perceived the payment as an
apoyo’ or support for actions they would carry out anyway (Kosoy et al., 2007). Chapman found a
parallel result among participants in Costa Rica's PES, where most providers describe the payments
as an ayuda, a type of help or assistance to protect the forest and support rural landowners
(Chapman et al., in prep). The ‘Flowering Meadows’ PES in France focuses on outcomes while
leaving farmers flexibility to determine means, allowing farmers to demonstrate their competence while
also helping to change farmer’s perspectives on biodiversity (Fleury et al., 2015).
A focus on stewardship might allow for greater flexibility in implementation. Rural landowners in
Washington State valued flexibility and the option to adapt PES program conditions to their particular
farm or land, for example, by varying the width of riparian buffers or allowing working buffers that
integrate riparian habitat and production (Chan et al., 2015). Flexibility not only makes PES programs
more attractive to land managers but also allows them to apply their place-specific knowledge to
achieve program goals, e.g., targeting riparian plantings to maximize shading of rivers or filtering of
runoff (see also 7 below). For example, programs where farmers propose their own solutions to
achieve ES goals or are involved collaboratively with other stakeholders to define the goals and
means may be more motivating (Fleury et al., 2015). It is not only important to allow flexibility to find
creative solutions in order to find synergies between conservation and land managers’ other goals, but
also because the process of problem-solving is in itself enjoyable and motivating for many (Kaplan,
2. Pay stewards and we all contribute, distributing rights and
responsibilities inclusively [vs. misplaced right and responsibilities]
By paying for land managers to act as stewards rather than polluters, and by sharing the burden of
payment across the supply chain, programs would distribute rights and responsibilities in a manner
more conducive to sustainability (Figure 1). Such programs would avoid sending the signal that ES
providers are free to pollute/degrade unless paid not to do so, or that ES beneficiaries are responsible
for securing desirable behavior upstream. Instead, ES providers would be expected to bear some of
the costs of management, and ES beneficiaries would not be solely responsible for ensuring continued
ES provision. It is especially crucial to avoid putting the responsibility on ES beneficiaries when they
are poor or disempowered, or when they have long relied upon the ES (as with indigenous peoples
and clean water, wildlife, etc.). Furthermore, such programs would also assign responsibility to the rest
of us who are complicit in such production processes, e.g., as the retailers and consumers of goods,
sending the signal that it is unacceptable to profit from production that incurs ecological degradation
Chan et al., Re-Imagining PES
without mitigating those harms.
Figure 1. The current and proposed new models for payments for ecosystem services (PES),
including their explicit and implicit distribution of responsibilities. A. Current models implicitly
place the responsibility on beneficiaries of ecosystem services (ES) to protect ecosystems for
the continued delivery of benefits, implicitly giving producers, extractors, and the supply chain
the right to pollute (and the right to receive payments for ceasing to pollute, which penalizes
those who were already acting as good stewards). Such rights and payments may undermine
sustainability. B. In contrast, our reimagined PES puts the responsibility on producers,
extractors, and the supply chain to mitigate their impacts, including by paying ES stewards to
protect ecosystems. These responsibilities and payments may foster value and norm change
towards sustainability. Governments have an important role to play, but they need not lead.
The distributed responsibility may be crucial for achieving sustainability. The incipient
movement called CoSphere (a Community of Small-Planet Heroes, Ecologically Regenerating
Economies) embodies this logic of responsibility-taking.
An even sharing of responsibilities might be achieved in several different ways. First, ‘policy mixes’
where different instruments work togethercan distribute responsibilities and also rights to
Chan et al., Re-Imagining PES
landowners, as is the case in Costa Rica where a ban on deforestation confers responsibilities while
the nationalized PES program confers rights (Porras et al., 2013). Second, broad responsibilities for
environmental degradation might also be indicated by paying only part of the costs borne by PES
participants (see solution 3), and by inviting or even requiring firms and/or individuals to mitigate said
degradation via co-funding a PES program (see solution 6). Our proposal to pay only part of the costs
(co-pay) bears similarities to the notion of co-investment in environmental stewardship (CIS),
discussed by van Noordwijk & Leimona (2010). We agree wholly with van Noordwijk & Leimona’s
conclusion that “A language of CIS, ‘co-investment’ and ‘shared responsibility’ may be more conducive
to the type of respect, mutual accountability, and commitment to sustainable development that is
needed” because it “retains reference to social exchange rather than financial transactions” (p. 17).
3. Co-pay (sometimes in-kind), complementing and ‘crowding in’ intrinsic
motivations [vs. crowding out]
By paying only a part of a participant’s opportunity costs, a PES program might crowd in intrinsic
motivations rather than crowd them out. If Chan et al.’s (2016) contention is true, that landowners, and
farmers in particular, already possess a wide range of stewardship values (‘relational values’, to be
distinguished from instrumental and intrinsic values), there should be abundant opportunities to crowd.
We already know that non-cash/in-kind payments (e.g., supplying needed tools or resources, including
technical assistance) are less prone to crowding out inherent motivations (Ariely, 2008; Leimona et al.,
2015). This proposal goes even further, aiming for crowding in. By paying only a portion of the total
costs, ‘co-payments’ should ensure that ES providers would participate only if they are subsidizing the
project with their own time or resources. This commitment of one’s own time or resources triggers the
avoidance of cognitive dissonance to consolidate stewardship values (because only a commitment to
stewardship can dissolve the dissonance of bearing costs for actions that don’t yield profits).
Furthermore, co-payments should preserve any motivations based on social approval (Fehr & Falk,
2002; Lapeyre et al., 2015) (because the action may still be perceived as moral rather than
mercenary). Note that this proposal is decidedly at odds with prevailing economic advice about
incentive schemes, which includes prescriptions that payments should exceed opportunity costs
(Wunder, 2013), and that cash payments are preferable (e.g., Ferraro & Kiss, 2002).
As already noted, some programs are already functioning in the ways suggested. First, several PES in
Central America are paying less than opportunity costs (Kosoy et al., 2007). Second, there are
indications that Costa Rica’s PES is functioning at least partially as a recognition of good stewardship
(Anderson et al., in prep.). Third, technical assistance associated with landowner incentive programs
can be both motivating (Chapman et al. in prep; Zammit, 2013) and productive in securing
stewardship outlooks and future-oriented behaviours (Wilcove & Lee, 2004; Vignola et al., 2012).
There is some evidence in the literature that PES can act to reinforce non-economic motivations for
conservation, thus “crowding in” rather than “crowding out” (Rode et al., 2015; Lapeyre, et al., 2015).
Financial incentives including PES have the potential to reinforce or reduce intrinsic motivations and
social norms such as pro-conservation norms, depending in part on how institutions and initiatives are
structured and the context in which they are implemented (Bowles, 2008; van Noordwijk et al., 2012).
For example, in Ireland a small tax greatly reduced plastic bag use by identifying such use as an anti-
social behaviour (Bowles, 2008). Small incentives can also encourage people to take actions they
support but do not prioritize, as was demonstrated when an offering of a small amount of lentils
increased child immunization in India (Banerjee et al., 2010). In this way, PES payments could act like
a nudge to incite/inspire people to act based on existing motivations for conservation (Olmsted et al.,
Chan et al., Re-Imagining PES
in prep).
4. Forget small-scale additionality; focus on efficiency via attractiveness
and norm change [vs. efficiency/equity dilemma]
If programs were designed to pay participants for good behaviours (both past and future), individual
parcels may not achieve additionality in the short term, but the program might be more efficient in the
long run. Long-term success would stem from the activation and reinforcement of stewardship values
(as above), and from building trusting relationships between ES providers and program officials via an
inclusive program that feels fair. Trust, after all, is central in such programs (Goldstein, 2005; Kerr et
al, 2012). Including ES providers who would do the desired action without the program (or who are
already doing it) would mitigate the perverse incentive for ES providers to pretend that they would not
have done the action without the program (a self-reinforcing representation), or to undermine past
efforts to make room for new additionality (e.g., setting fire to forests so as to qualify for a new set of
payments for forest regrowth). Under an award model, it is acceptable and appropriate to pay ES
providers for actions that they already wished to do: that is precisely how a program leverages small
payments (less than opportunity costs) into full actions, and how it might build and consolidate
stewardship norms.
Some programs have adopted this approach, at least partly. For example, some programs have
intentionally chosen payments that are equitable across landowners regardless of the conservation
opportunity of their land, in the intent to build goodwill (Chopra et al., 2012). In another Costa Rican
example where the PES concept was more familiar, ICE, the national energy utility managing a dam
was eager to pay upstream farmers to reduce sedimentation (Vignola et al., 2012). Rather than
differentiated payments or even equitable ones, the farmers revealed that technical assistance was
more desirable and seen as more fair; ICE was happy to comply (Vignola et al., 2012).
Our argument to forget additionality at the scale of the individual participant, focusing instead at the
scale of the program, aligns directly with Pascual et al.’s (2010) definition of additionality as the
“difference between the gross welfare effects induced by the scheme on society (...) and the total cost
incurred to implement it” (p. 1239). ‘Gross welfare effects’ should also include the pleasure that ES
providers receive from receiving payment to take actions they wished to do anyway, and the
widespread happiness with a fair and equitable program.
5. Employ intrinsic motivations and peers to reduce monitoring needs [vs.
burden of monitoring]
ES provider incentives to cheat are greatly reduced when providers make a publicly conspicuous
commitment. The design of co-payments, which intend to ensure that the program is attractive only to
those with intrinsic incentives, thereby greatly reduces the individual motivation to cheat. Any public
acknowledgement of a commitment to a stewardship identity would greatly enhance this individual
motivation to comply via social approval/disapproval (Cialdini, 2007). In such contexts, people can
‘police’ each other, as occurs with universities that have adopted honour codes against plagiarism.
Given sufficient intrinsic motivations to comply, exhibiting trust in the form of an honour code and an
intentionally low-level of official monitoring might engender reciprocal trust and trustworthiness from
participants. Such peer monitoring could be complemented by coarse-scale monitoring of the
aggregate outcomes of the program, which would be important for ensuring additionality at the
Chan et al., Re-Imagining PES
program-scale (see 4). The multiple levels of monitoring aligns with calls for polycentric governance
systems (Biggs et al., 2012).
Peer monitoring has been employed in farm management and shown to be effective in both US and
Brazilian cases. Carlisle’s (2015) study of organic certification found that informal peer-to-peer
monitoring and participation in a self-organized community were more important in ensuring
compliance with organic standards than official regulation and monitoring. In addition to reducing
costs, flexible and peer-based monitoring can encourage learning and innovation. In one case,
inspectors able to offer advice and connections to other growers could have served as extension
agents to help growers new to organic standards; new standards prohibited such assistance from
inspectors (Carlisle, 2015: 16). When firms participate in PES as ES suppliers, community-based
monitoring may provide opportunities for community participation in partnership with or as monitors for
firms, further incentivizing positive innovation on the part of private sector actors. Despite research
suggesting that community participation in Monitoring Reporting and Verification (MRV) results in high-
quality, cost-effective assessments and increased legitimacy (Danielsen et al., 2013; Danielsen et al.,
2005; Larrazábal et al., 2012; Brofeldt et al., 2014), community participation in monitoring remains
underdeveloped (Danielsen et al., 2013; Pratihast et al., 2013). Reimagining PES as suggested here
might involve increasing community monitoring.
6. Include funders seeking to mitigate their impacts, thus involving parties
throughout the supply chain [vs. limited applicability]
Whereas traditional PES programs are designed for private or public beneficiaries to secure private or
public benefits, a program designed to enable funders to mitigate impacts and/or pay “user fees for
nature” could potentially involve large portions of supply chains. As we described above, firms can be
hesitant to get involved in conservation initiatives like PES for a variety of reasons. While full treatment
of this idea is beyond the scope of this paper, we see hope in uniting an offset funding model with a
PES delivery mechanism (Chan et al., 2017 in press). A single payment, low-overhead program option
that allowed a firm to not only mitigate their impacts across their entire operation (not just a single
product), but also then identify their brand with an entire community or movement of “conscientious
consumers and producers”, could be attractive to firms seeking simple ways to become more
sustainable that are low-risk but potentially high-impact.
Such a broadening of the funding for environmental stewardship would seek to recognize that, insofar
as the whole supply chain benefits from the production of the product that has environmental impacts,
the whole supply chain should share in reducing those impacts. Involving the supply chain in this
manner might work against the “race to the bottom”, wherein producers are incentivized to cut corners
in environmental stewardship in order to supply low-cost goods, because many costs of environmental
damages are not currently internalized into the cost of products. Obviously, involving the supply chain
in preventing environmental degradation is neither novel in itself nor easy to achieve, and a full
proposal is beyond the scope of the current article. Here we briefly contemplate a possible novel
pairing of supply chains with PES.
This model we propose is complementary to certification. Whereas certification (e.g., organic) seeks to
enable consumers to contribute to environmental improvements by paying a price premium for a
certified product, the premium paid by consumers largely goes towards maintaining a distinct but
parallel supply chain (to the conventional product), with relatively little for farmers changing their
environmental management. Insofar as certified products often have a market share much smaller
Chan et al., Re-Imagining PES
than the conventional product, the loss of economies of scale throughout the supply chain can result in
a highly inefficient vehicle for consumer participation in production. A system of offsets for
environmental damages should alleviate these inefficiencies (Chan et al., 2017 in press), enabling
consumer funding to effect management via PES on both certified and conventional fields. Such an
initiative is underway (, and in theory would allow consumers to compare different
levels of environmental impact associated with comparable products, and to contribute to paying for,
and thus internalizing and taking responsibility for, each product’s environmental impacts. Only when it
is easy, enjoyable and affordable to enact personal responsibilities for distant environmental impacts
is it likely to become normal to do so (Chan et al., 2017 in press).
7. Invite place-based solutions, inspiring agency [vs. top down
If program officials do not dictate appropriate stewardship actions, but rather invite ES providers to
propose what they would like to do (that contributes to specified environmental outcomes), there’s an
immediate inspiration of the creative agency of producers as stewards. One of the more powerful
leverage points for sustainability is to enable self-organized solutions (Meadows, 2009). In principle,
such payments need not be constrained to farmers and landowners, but open to a wide range of
citizens, organizations, and even possibly firms to engage as stewards and distinguish themselves as
As described above, reverse auctions generally enable a greater degree of agency among PES
participants by funding a diversity of possible actions. Such flexibility may be partly responsible for the
considerable cost-savings that seem to result from such programs (Stoneham et al., 2003; Ajayi,
2012), in part because ES providers may be choosing actions that they already wish to undertake,
such that they are willing to perform conservation actions for compensation less than opportunity
costs. A further strategy is to incorporate the preferences of potential participants. Depending on the
particular social and ecological context participants may prefer payments to be communal or
individual, in-kind or cash, closely tied to concrete actions or focused on outcomes with flexibility for
implementation (Kaczan & Swallow, 2013; Kolinjivadi et al., 2015). For example, Mexico’s national
PES program went through substantial changes between design and implementation, as local actors
imprinted their own concepts and priorities, leading to a final design that was a better fit with local
needs (McAfee & Shapiro, 2010).
Novel and flexible forms of PES could be more motivating to farmers and other ES providers. Rather
than expecting people to adopt PES for either altruistic or economic reasons, we might use a form of
participatory problem solving so that ES providers can look for options that are good for the
environment and improve their lives, land or livelihoods. Such an approach has been suggested by
Kaplan in the context of green consumerism and individual responsibility for environmental impacts
(Kaplan, 2000). As an example, the successful Vittel PES case in France involved substantial
participation by farmers and other stakeholders in the region to design the program rules and structure
(Perrot-Maitre, 2006). Also from France, the 'Flowering Meadows' PES program involved participation
from many different stakeholders and contributed towards shifting farmers’ perceptions of biodiversity
from "an obligatory restriction, into an asset" (Fleury et al., 2015: 111).
Chan et al., Re-Imagining PES
Implications and Applications: Scaling Up
Figure 2. The current and proposed new models for payments for ecosystem services (PES),
emphasizing design differences. (i) Whereas mainstream PES models (A) generally exclude
the supply chain (including consumers, retailers, distributors, etc.), reimagined PES models (B)
might include these firms and individuals as funders to share responsibilities broadly. (ii)
Whereas mainstream models generally avoid paying stewards who are already undertaking
positive actions (e.g., landowners who are already planting trees or maintaining set-asides),
reimagined models would include such proactive agentsfocusing on fairness, additionality of
the whole program, and not sending signals that positive actions are worthless unless the
landowners previously undertook negative actions. (iii) Whereas mainstream models favor
cash payments, reimagined models favor in-kind payments and cost-share arrangements to
crowd in inherent motivations (rather than crowding them out). (iv) Whereas mainstream
models generally pay for universally prescribed actions, reimagined models would solicit
proposals for individualized actionsenlisting agency in stewards and producers. (v) Whereas
mainstream models generally require third-party monitoring (often at considerable cost),
reimagined models might employ peer monitoring (with greatly reduced costs). Not all
Chan et al., Re-Imagining PES
proposed changes will be feasible or appropriate everywhere.
Our analysis suggests that seven major shortcomings/limitations impede many PES programs from
contributing substantially to sustainability, but that these problems are not insurmountable. Rather,
several changes in program structure could have large effects in part via a conceptual shift from PES
as tools for behaviour change given existing values and responsibilities (narrow-responsibility PES) to
PES as tools for extending values and responsibilities (Figure 2). Here we focus on three broad shifts
for such extension: crowding in (leveraging and increasing non-monetary motivations to participate),
cultivating agency (fostering a self-organization in actions and monitoring), and embodying trust
(spending funds on rewarding and encouraging stewardship rather than policing it). These three shifts
permeate the seven solutions above.
By directly addressing the concerns and needs of ES providers, such programs have the potential to
enhance stewardship values, thus promoting and fostering an ethic of more sustainable production
(Anderson et al. in prep; Chapman et al., in prep; Olmsted et al., in prep). Such an ethic among
engaged participants might also facilitate more efficient monitoring and evaluation by reducing the
motivation to exploit shortcuts. Institutions articulate values, whether we like it or not, contributing to
the formation of preferences and understandings of responsibilities (Vatn, 2005); perhaps it is time to
recognize this explicitly, choosing and designing instruments not only for behaviour change but for the
values they articulate. Large-scale PES and PES-like programs have been employed by governments
in the EU, USA, Canada, China, Brazil, Central and South America, and beyondall in pursuit of
sustainable social-ecological relationships. By enlisting broader social-ecological literatures, we have
proposed a suite of design shifts that might embody the conceptual shifts toward that worthy goal of
sustainability. Several of the proposed design shifts have been implemented partially and separately,
which attests to their feasibility, but new trials are needed to reveal the feasibility and effects of
implementing them in context-dependent ways, intentionally, fully, and together.
For PES to contribute meaningfully to sustainability, they will require substantial involvement from
firmswhich may benefit from new or revised regulations. Presently, firms participate in PES primarily
for corporate social responsibility or institutional investing (Dixon & Challies, 2015), which are
generally not seen as core business activities, although they may provide legitimacy to core activities.
An estimated 58% of all forest carbon offsets in Asia are motivated by CSR-activities (PetersStanley
et al., 2013), another form of philanthropy. The challenge from a firm perspective, then, is twofold:
moving sustainability efforts from such peripheral activities into firms' core business models (Loorbach
& Rotmans, 2010, Geels, 2004), and ensuring that CSR moves beyond marketing to have meaningful
impacts on the ground. Several government policy changes might foster this: e.g., governments may
incentivize firms to be more active in the field by mandating innovative accounting standards (Engel, et
al., 2008) defining more stringent CSR policies (Lyon & Maxwell, 2008; Konar & Cohen, 2001), and
adopting new taxation tools (Kemkes, et al., 2010). Through the introduction of these and similar
approaches, it is possible that firms’ engaging in PES, in partnership with local communities, results in
a sustainable image that is not merely a green sheen but a substantial contribution to innovation for
From a research perspective, the challenge is to address incentive programs from a variety of
disciplinary and interdisciplinary perspectives with long-term outcomes as a priority. It is not sufficient
to claim, for example, that schemes paying for activities that would have occurred anyway likely suffer
from low effectiveness. If the goalas suggested in solution 4is to normalize conservation (Chan et
al., 2017 in press), such programs cannot be evaluated only at the scale of the individual landowner. If
programs that resonate with local cultural ecosystem services and relational values could both foster
Chan et al., Re-Imagining PES
community-scale stewardship norms (see above) and a sustained deep relationship with the land
(Chan & Satterfield 2016), individual additionality may be a myopic metric. A more integrated
interdisciplinary perspective will be crucial to investigate the effectiveness of PES as both social and
economic tools.
Ultimately, reimagined PES programs could contribute to the crucial task of normalizing the taking of
responsibility for one’s impactsa potentially powerful relational value (Chan et al. 2016). Such a goal
extends well beyond primary producers and governments, including private firms and individual
consumers who are primary drivers of ecosystem impacts. In many sectors there is a clear willingness
to support responsibly derived goods (Hollender & Fenichell, 2004). Perhaps that latent willingness
might be tapped much further, such that firms and consumers invest in PES not only to secure a
sustainable supply of needed goods and services for their own benefit, but also to mitigate the impacts
that accompany industrial production and consumption. As such, the PES that we imagine might
enable not only ES providers, but also firms and consumers, to express moral values that are central
to interpersonal ethics but are latent regarding environmentally mediated impacts. Many ethical
approaches, including utilitarian and deontological, might recognize a responsibility to mitigate any
impacts we have on others via our consumption and the environmental impacts entailed. And yet we
are all complicit in environmental impacts via our purchases and lifestyles (albeit to highly variable
degree, given concentrations of wealth and power), the vast majority of which go unmitigated. Our
reimagined PES would therefore seek to provide an important new means for all consumers to
express that core value in environmental settings.
This vision of shared-stewardship for collective impacts has inspired an incipient movement called
CoSphere (a Community of Small-Planet Heroes, Ecologically Regenerating Economies, This new movement seeks large-scale market transformation by providing the
missing infrastructure to enable individuals and firms to have net-positive impacts on our planet’s
biodiversity and ES, via contributions to conservation and stewardship in the form of PES programs
designed as above. While we have great enthusiasm for CoSphere in particular, it represents but one
possible manifestation of the transformative potential in reimagined PES.
The manuscript benefited from helpful comments from two anonymous reviewers. The authors would
like to acknowledge the following funding sources: KMAC was supported by the Canada Research
Chairs program and a Canadian Foundation for Innovation Leaders Opportunity Fund grant (UBC #
17R39196); EA was supported by a Vanier Canada Graduate Scholarship, MC by a UBC Four-Year
Fellowship, and PO by a NSERC Post-Graduate Scholarship (Doctoral). This research was also
supported by a SSHRC Insight Grant (UBC # 22R09598).
Chan et al., Re-Imagining PES
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... However, our study points to the need for more financial supports that enable farmers to engage in more conservation behaviors. Importantly, the existing stewardship motivations that emerged in our research are potentially at risk of being crowded out by financial motivations emphasized by a PES, which have been documented to sometimes replace or overwhelm stewardship motivations with financial motivations (Rode et al. 2015;Chan et al. 2017). This is especially concerning if participants are being paid to pollute less, rather than generate new ecosystem services, because they may feel entitled to pollute when financial payments are no longer made (Chan et al. 2017). ...
... Importantly, the existing stewardship motivations that emerged in our research are potentially at risk of being crowded out by financial motivations emphasized by a PES, which have been documented to sometimes replace or overwhelm stewardship motivations with financial motivations (Rode et al. 2015;Chan et al. 2017). This is especially concerning if participants are being paid to pollute less, rather than generate new ecosystem services, because they may feel entitled to pollute when financial payments are no longer made (Chan et al. 2017). Framing a program as a reward for stewardship, rather than payment for pollution, could address this risk of motivational crowding out. ...
... Framing a program as a reward for stewardship, rather than payment for pollution, could address this risk of motivational crowding out. Chan et al. (2017) suggest that PES programs may be designed deliberately to crowd in altruistic motivations, reinforce stewardship ethics as social norms, and secure long-term sustainability through careful program framing and a focus on community-scale additionality, rather than individual actions. These policy implications are particularly relevant to our findings and context. ...
As agricultural conservation priorities evolve to address new complex social-ecological problems and emerging social priorities, new conservation incentive program participation and success can be enhanced by incorporating local stakeholder preferences into program design. Our research explores how farmers incorporate ecosystem services into management decisions, their willingness to participate in payment for ecosystem services programs, and factors beyond compensation level that would influence participation. We conducted three focus groups with 24 participants between January of 2019 and May of 2019 in Vermont. Our study revealed that a strong, intrinsic stewardship ethic motivates farmers to enhance ecosystem service provisioning from their farms, though financial pressures often limit decision-making.These results suggest that programs with sufficient levels of payment may attract participation, at least among some types of farmers, to enhance ecosystem services from farms in Vermont. However, farmers may be deterred from participating by perceived unfairness and distrust of the government based on previous experiences with regulations and conservation incentive structures. Farmers also expressed distrust of information about ecosystem services supply that conflicts with their perceptions of agroecosystem functioning, unless delivered by trusted individuals from the extension system.The delivery of context-specific information on how management changes impact ecosystem service performance from trusted sources could enhance farmers’ decisions, and would aptly complement payments. Additionally, farmers expressed a desire to see a program that both achieves additionality and rewards farms who have been stewards, goals that are potentially at odds. Our findings offer important insights for policy makers and program administrators who need to understand factors that will influence farmers’ willingness to participate in payment for ecosystem service programs and other conservation practice adoption initiatives, in Vermont and elsewhere.
... Payments for Ecosystem Services (PES) operate as incentivedriven programmes and projects intended to protect or provide sustainable flows of ecosystem services. They can refer to small local projects targeting specific species (e.g. the sale of permits for sustainable selective hunting of a turkey in Guatemala to fund habitat conservation and support local livelihoods), as well as substantially larger projects both in geographic and monetary terms (e.g. the US$1 billion investment of the Norway Environment Ministry to the Brazil Amazon Fund to fund programmes encouraging afforestation and reducing deforestation) (Chan et al., 2017). ...
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The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)’ 2020 “Global assessment report on biodiversity and ecosystem services” states that nature and its contributions to people play an important role not only for the health of the planet, but also to achieve the Sustainable Development Goals. It highlighted notably the need for improved understanding of the interactions between ecosystem services and the goals and targets to end poverty and hunger and to enhance people’s well-being. Ecosystem services, we know, encompass all of nature’s contributions to people. It can be raw materials such as water or wood, but also actual services like pollination of crops or carbon sequestration. Being able to assess these ecosystem services is, for communities, another step in understanding the area in which they live and how to live sustainably, in harmony with their direct environment. For the first time, a specific, user-friendly manual dedicated to assess ecosystem services was created for biosphere reserve managers and decision-makers, and adapted to the African biosphere reserve context. Filling a gap in the Man and theBiosphere community and beyond, this manual will provide its readers with the necessary tools and knowledge to engage their communities in achieving the Sustainable Development Goals.
... We surveyed 9 % of all rice growers in the Riverina region of the Murray-Darling Basin about their willingness, ascertaining values, motivations and preferences, and developing a better understanding of the particular agricultural system and context in which they are operating (see Byerly et al., 2019;van Putten et al., 2011;Mitani and Lindhjem, 2021). Such knowledge can improve incentive uptake and effectiveness by avoiding issues with additionality, crowding-out, persistence and opportunity costs, address trade-offs between conservation benefits and farmer costs, and ensure selection of management requirements that are relatively easy and inexpensive to implement without major disruption to existing practices (Bottazzi et al., 2018;Chan et al., 2017;Christensen et al., 2011;Dayer et al., 2018;Selinske et al., 2015). We applied contingent valuation (CV) and a discrete choice experiment (CE), which can be complementary in providing insights into how farmers value and trade-off attributes of an incentive program (e.g. ...
Effective incentive programs for farmers to conserve biodiversity on their properties are vital for sustainability. Most such programs have focussed on natural areas, like revegetating waterways, but novel agricultural habitats amplify the commitment required of farmers and the need for collaboration in the conservation process. The rice fields of Australia's Murray-Darling Basin are a key habitat for a globally endangered waterbird, the Australasian bittern, but early and sufficient ponding periods that facilitate successful breeding are inconsistent with max-imising yield per megalitre of water used. We aimed to understand farmers' willingness to undertake 'bittern-friendly' rice growing practices and their preferences for hypothetical incentive programs. Public recognition of the habitat values of their fields was a key motivation for participation, and, across the industry, we estimated that rice growers were willing to forgo an annual profit margin totalling $AU1.42 million per annum to further bittern conservation. We tested for social desirability bias, finding the inferred valuation-their nearest rice growing neighbour-was 51 % lower, but still a substantial in-kind contribution. More than half of growers did not need compensation to control foxes and cats, or to avoid herbicide use on rice bay banks, while about a third would undertake each of the other conservation actions. For financial incentives, a choice experiment showed the payment rate was important but farmers strongly preferred less demanding management requirements. The 11-day variation in ponding commencement and period was highly valued by growers, and can be crucial to bit-terns. Growers also preferred higher levels of contract flexibility, while the intensity of compliance monitoring had little impact on their choices. The preferred incentive type was to use public environmental water with no money exchanged, followed by a consumer-funded program with bittern-friendly rice products, and a standard government contract, whereas a pledge system and a tender were relatively unpopular. Bittern-friendly rice growing incentive programs should be successful if they foster custodianship, harness in-kind contributions, improve rice farming's public image, and work with growers where opportunity costs for additional water are low.
... Another way to enhance sustainability is to pay for forest protection, greening of agricultural land or other approaches. Ecological Focus Areas (EFAs) allow farmers to adapt and manage farmland that meets requirements of European biodiversity enhancement (Chan et al., 2017). Individuals that meet the requirements of the program are paid based upon land and biodiversity enhancements. ...
Climate change is affecting the availability, distribution, and quality of water around the world. The impacts of climate change are not happening in a vacuum, but rather, are layered onto and exacerbate pre-existing inequalities and injustices. In this chapter, we argue that water justice and climate change are intertwined in three critical ways. First, we argue that water injustice creates climate change vulnerability and climate change entrenches water injustices. Therefore addressing water injustices will also reduce climate change vulnerability. Second, we argue that the proposed solutions to climate change can and will have implications for water justice. In some cases, mitigation and adaptation solutions will create or deepen existing water injustices while other solutions may represent a space for positive action. We examine six examples of how responses to climate change are poised to affect water justice: lithium mining, REDD+/Payment of Ecosystem Services, hydropower dams, rural to urban water transfers, desalination, and adaptive management. Third, water justice and climate justice struggles can and should build greater unity. By building unity (not uniformity) between water justice and climate justice struggles, movements could gain better insight into the local-global connections that exist between water injustice and climate injustice. Importantly, we also caution scholars against viewing climate change as the driver of water injustice. Climate change, as a discourse, can naturalize water scarcity and obscure the power and politics that drive water injustice. By exploring these important intersections between climate change and water justice, we argue that water justice and climate justice struggles and scholarship would benefit considerably from one another.
... Another way to enhance sustainability is to pay for forest protection, greening of agricultural land or other approaches. Ecological Focus Areas (EFAs) allow farmers to adapt and manage farmland that meets requirements of European biodiversity enhancement (Chan et al., 2017). Individuals that meet the requirements of the program are paid based upon land and biodiversity enhancements. ...
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Through the efforts shared in this chapter, we embrace the hypothesis that local representations of our changing climate offer a key angle for facing climate change. We describe the coconstruction processes of climate services in five sites across Europe: Bergen (Norway), Brest, Kerourien (France), Dordrecht (the Netherlands), Gulf of Morbihan (France), and Jade Bay (Germany), to share novel ways of transforming state-of-the-art climate science into action-oriented place-based climate services that can be integrated with social understandings and practices of coping with change in Europe. The formal context for “modes of representation” enabled us to recognize the importance of explicitly linking social transformation intentions with local challenges and values, and to connect from there with national and European Framework Directives related to climate services. We reiterate the importance of having local stakeholders engage in the climate services coproduction process in order to forge common commitments and incorporate value perspectives, even those that may be polarized, throughout society as a whole.
... However, the limited or adverse results of its implementation in various parts of the world have questioned its effectiveness. The study of Chan et al. (2017) has identified the following kinds of problems: (i) new negative externalities, (ii) loss of rights and confusion over responsibilities, (iii) displacement of intrinsic motivations, (iv) difficulties in the distribution of compensation, (v) high monitoring costs, (vi) limited applicability, and (vii) lack of understanding between the institutions and social groups involved. ...
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The divergence between the disappearance of primary forests and the appearance of secondary forests indicates a set of circumstances that simultaneously converge in what we called the society-agriculture-forest complex. Such circumstances vary between places and over time and are associated with internal factors-factors originating within the reference system-and external factors-factors originating outside the borders of the reference system-restrict the use of standard strategies for any reality. We present a quantitative model that helps to understand the relationships of the society-agriculture-forest complex as a whole. This comprehensive understanding will allow a clearer discussion of the positive and negative consequences of prioritizing actions on any of the system components. Our model establishes a set of quantitative relationships among: (i) the requirements of food and timber products for society to maintain its structure and functionality, (ii) the level of openness of the society with respect to other societies for the exchange of resources, and (iii) the interface between the economic productive systems and the ecological productive systems. To test the model, the case of Huayopata (Peru) was studied. Findings suggest that the abandonment of agricultural production and, particularly, of tea favors the appearance of secondary forests. However, projects by the Congress of Peru to reactivate the production of tea without adequate technological support to improve the current processes that use firewood for boilers would put the forestry system at risk. In addition, a potential worker 'pull factor' could reconfigure the food system and impact on the local agricultural sector. Supplementary information: The online version contains supplementary material available at 10.1007/s10668-022-02457-6.
... The quantification of compensation is at the core of ecological compensation work and is key to establishing an effective watershed ecological compensation mechanism [7], which is directly related to the scientific nature and implementation effect of watershed ecological compensation. The compensation not only reasonably reflects the ecological value provided by the ecosystem service suppliers [8] but also is accepted by all parties involved to effectively correct the economic relationship between upstream and downstream stakeholders in the watershed [9]. ...
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Watershed ecological compensation is an important economic tool for solving the protection–development conflict. However, establishing a sound ecological compensation plan for rational water resource use at the watershed scale remains challenging. Monthly water samples were collected between April 2019 and July 2020 at 28 points to analyze the spatiotemporal variation in water quality in the Taoxi Creek watershed, which is important for local water security. The Soil and Water Assessment Tool was used to simulate water supply, demand, and spatial flow at the watershed scale. Water quality restoration cost was integrated with ecosystem service flow to quantify the watershed ecological compensation. The ecological compensation using water quality restoration cost based on pollutant treatment cost and water quality target level was CNY 11.9 million (USD 188 million). Taoxi Creek was identified as the major supplier of water ecosystem services for downstream residents, and the ecological compensation based on ecosystem service flow was CNY 18.9–47.2 million (USD 3.0–7.5 million). Combining both calculations, the watershed should annually receive CNY 30.8–59.1 million (USD 4.9–9.3 million) of economic compensation from downstream ecosystem beneficiaries. This study provides a scientific basis for improving the ecological compensation scheme in the Taoxi Creek watershed and a reference for ecological compensation formulation in other watersheds.
... Yet, to date, PES programs have only rarely, and under specific conditions, achieved improvements in conservation outcomes where they have been implemented (Chan et al., 2017). Furthermore, numerous theoretical and empirical concerns have been raised about their distributive, procedural, and contextual equity in practice (Etchart et al., 2020;Haas et al., 2019;McDermott et al., 2013;Pascual et al., 2014;Wunder, 2007). ...
Over the past decade public and private actors have been developing a variety of new policy approaches for addressing agriculturally-driven deforestation linked to international supply chains. While payments for environmental services (PES) have been advocated in many contexts as an efficient and pro-poor environmental policy to incentivize conservation, they have been the subject of intense scrutiny and criticism for leading to mixed and sometimes adverse environmental and social outcomes. It remains unclear whether such an approach is an improvement over existing approaches to govern sustainability in supply chains and especially as a mechanism for reducing ecosystem conversion. Here we conduct an ex-ante analysis to examine the potential outcomes of using a standalone PES scheme versus existing standalone market exclusion mechanisms (MEM) to govern commodity supply chains. The analysis develops a theoretical framework to examine the potential effectiveness, cost-effectiveness, equity, and legitimacy of the two approaches and then applies this framework using qualitative analysis of secondary and interview data. Using this theory-driven evaluation approach we examine the case of the Brazilian Cerrado, where a PES mechanism is currently being proposed to achieve zero-deforestation targets in soy supply chains. We find that both standalone approaches suffer from different strengths and challenges and would be better used in combination. We conclude that a mixture of strict market exclusion with positive incentives and enabling programs that are targeted at the poorest farmers would be more effective, cost-effective, equitable, and legitimate. However, in the future such supply chain focused soy deforestation control efforts in the Cerrado must be complemented by broader jurisdictional approaches to addressing deforestation and sustainable developement that include all land use actors, not just soy farmers. These more inclusive and balanced initiatives can help ensure that avoiding deforestation goes hand in hand with supporting sustainable livelihoods for a wider range of actors in the Cerrado.
Animal and plant images are omnipresent in corporate marketing communications. In this short communication, we posit that this is an ecosystem service belonging to the “spiritual, symbolic and other interactions with natural environment,” irrespective of the beneficiary’s presence in the environmental setting. Using a case study of a large Polish producer of building materials that features a white stork in its marketing (advertising, packaging etc.), and a survey of construction professionals, we suggest that this company should actually pay back to white stork conservation. Such a scheme could follow the logic of payments for ecosystem services, and it is in line with previous calls for various species or wildlife royalties. We discuss the context of creating such payments, along with their key advantages and challenges. Ultimately, similar arguments could be made about the use of natural imagery in general.
This chapter outlines the ideas surrounding sustainable water management and use and the challenges surrounding future management as climate change intensifies. The major impacts to our water cycle, water storage, and precipitation patterns are discussed looking at how climate change is altering these patterns. Expected problems with flooding, drought, eutrophication, dead zones and emerging pollutants are examined and discussed. The chapter concludes with the necessary elements for change in order to develop a desired water management future.
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The management of ‘cultural ecosystem services’ (CES) is an essential consideration for sustainability, both because CES are crucial contributors to human well-being and because they may be key to sustainable human-ecological relationships. This chapter reviews the history of research and thinking on CES and considers what such research might imply for the management of ecosystems and of the human-ecological relationships that are key to CES and to future trajectories for humanity on Earth. In light of competing notions of weak and strong sustainability, the chapter advances several propositions regarding appropriate management for CES and so all ES. The chapter argues overall that CES can be seen as a newly recognized kind of human-natural capital, and as capital-producing: not only do positive experiences and attachment with nature yield both well-being and key capacities, they also yield the stewardship attitudes and identities that may be fundamental to local and global sustainability.
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Payments for environmental services (PES) have become a popular approach to address environmental degradation. However, evidence on its effectiveness is scarce and rather mixed. PES is not a panacea, but there are many cases where PES can be a promising tool. Yet, poor PES design translates into poor performance of the instrument. PES design is a complex task; the devil is in the detail of a number of PES design features. The purpose of this paper is to provide guidance in dealing with this complexity through a comprehensive review of PES design that is accessible to both academics and practitioners. Practitioner guidelines on deciding whether PES is the best approach and for selecting among alternative design features are presented. PES design has to start from a careful understanding of the specific ecological and socio-economic context. We now know a lot about which design features are best suited to which context. It is time to put these insights into practice.
Without widespread and immediate changes in human values and activities, massive tracts of natural habitat will be degraded to the detriment of those ecosystems, ecosystem services, and many threatened taxa—in the oceans and elsewhere. Despite this, the conservation movement has yet to devote much attention to the intentional project of widespread norm change. By one logic, the ecosystem services concept offers a means of integrating meaningful conservation into decision making by diverse government and corporate actors, potentially normalizing conservation. But normalizing conservation would require not only the uptake of ecosystem-services concepts but also widespread changes in conservation practice and stewardship values—on a scale that far exceeds what we have witnessed to date. The concept of ecosystem services has potential for assisting such a societal transformation because it effectively puts a human face on environmental change, thereby enabling the extension of responsibility and morality into environmental arenas at all scales. Furthermore, cultural ecosystem services merit particular attention because of their contribution to the formation of attachments to particular places and to identities rooted in nature and conservation, which presents an opportunity to consolidate and shape deep motivations for lasting conservation. Realizing these two opportunities in a way that is both appropriate and effective, however, will require several important innovations and new institutions, which we propose here. One key step is to enlist a broad base of consumers and corporations in the funding of actions to mitigate the environmental impacts associated with their participation in global supply chains, via funding vehicles that are conspicuous, easy, enjoyable, and not too expensive. We describe a new initiative called CoSphere (a Community of Small-Planet Heroes, Ecologically Regenerating Economies) that strives to create such structures. With consolidated effort and explicit attention, conservation can become normalized to the benefit of current people, future generations, and life on Earth.
Payments for environmental services (PES) have become a popular approach to address environmental degradation. However, evidence on its effectiveness is scarce and rather mixed. PES is not a panacea, but there are many cases where PES can be a promising tool. Yet, poor PES design translates into poor performance of the instrument. PES design is a complex task; the devil is in the detail of a number of PES design features. The purpose of this paper is to provide guidance in dealing with this complexity through a comprehensive review of PES design that is accessible to both academics and practitioners. Practitioner guidelines on deciding whether PES is the best approach and for selecting among alternative design features are presented. PES design has to start from a careful understanding of the specific ecological and socio-economic context. We now know a lot about which design features are best suited to which context. It is time to put these insights into practice.
We examine whether and how word choice can affect individual perceptions about a proposed Payments for Ecosystem Services (PES) program when objective outcomes are similar. From a traditional economic perspective, this type of manipulation would be considered unlikely to affect perceptions and behaviour, especially in the presence of pecuniary incentives and repeated decisions among sophisticated agents. From a behaviourally informed perspective, however, psychological and political theories of wording argue that word choice can have a significant impact on economic behaviour. To substantiate this discussion, we conduct a survey experiment that tests the impact of the words ‘payment’ and ‘compensation’ on favorability ratings of a proposed PES program. These preliminary findings suggest that the words used to describe public policies can be influential non-pecuniary interventions.