Concerns regarding Payments for Ecosystem Services

While PES schemes have received growing interest in many parts of the world, their impact is not necessarily positive. A number of concerns have been expressed regarding the environmental and social impact of PES projects. In particular, the following questions have been raised:

How can ecosystem services be valued?

In most places where incentives for ecosystem services have been proposed or implemented, we know very little about the actual value of the ecosystem services in question. For many environmentalists it is worth paying whatever is necessary to provide the ecosystem service. But how much do beneficiaries really benefit from the ecosystem service, and is the price of providing it really worth paying?

Are market-based instruments really the answer?

Many resource management decisions are strongly influenced by ecosystem services entering markets. As a result, the non-marketed benefits may be lost or degraded as they are not taken into account during the decision making. These non-marketed benefits are often high and sometimes more valuable than the marketed benefits.
The Millennium Ecosystem Assessment highlighted many instances whereby market based instruments failed to achieve ecosystem targets, therefore requiring direct regulation by governments.

How are local communities impacted by PES?

Even if markets can be created for some of the regulating, cultural and supporting services, supporting mechanisms may need to be created to ensure that the poor are not marginalised and/or excluded from the use of the services themselves and the financial benefits received from the sale of these services.

 

For example, in conservation projects, local communities are offered annual payments for conserving given areas of forest or natural vegetation. In exchange, they must implement a management plan defined by the government or a private agency and may not use the forest or natural areas in a non-prescribed way. Ecotourism and water-related projects are also tied in a similar way to management plans and often require communities to invest in infrastructure and marketing, usually resulting in loans and debt.

Some critics warn that by increasing the value of currently marginal land, PES programmes could increase the incentive for powerful groups to take control of it. Thus PES might exacerbate problems in situations where tenure is insecure.

PES projects can therefore lead to loss of control over territory, indebtedness, loss of land, or punitive financial and legal measures if communities do not fulfill management plans. As the case studies show, there is also the potential for marginalisation, repression, exploitation and the internal division of communities.