Realizing REDD+: what role for Payments for Environmental Services?

Photo: Anna Nordén

Realizing REDD+: what role for Payments for Environmental Services?

Focali Brief 2012:02 by U. Martin Persson, Francisco Alpízar, Anna Nordén.

This Brief presents a framework that can be used to assess the potential impact of Payments for Environmental Services (PES) schemes. Factors that determines the impact of PES are discussed such as additional forest conservation through targeted payments and the risk for unintended incentives and consequences and feelings of injustice among those who don´t receive payments. The brief further discuss the role for PES in national REDD+ policy. 
The Brief provides examples from Costa Rica and Mexico on behavioral aspects of PES with implication for the efficiency of PES in REDD+ policy. Landowners were during the field research interviewed about socio-economic characteristics and land issues. Economic experiments with Landowners were further carried out to examine behavioral responses to PES in Costa Rica.   

Key policy messages:
- Payments for Environmental Services (PES) policies are more likely to be efficient in incentivizing behavior that is not already prevalent (e.g., reforestation) than for conditions that are already frequently met (e.g., avoided deforestation).
- While targeting payments based on risk for non-compliance has a potential to increase PES impacts, gains risk being offset by unintended market and behavioral spillover effects. 
- While national PES programs alone may not be an effective tool for REDD+ imple¬mentation, there might still be a role for PES in a broader policy package. 
This Brief is based on the following three publications:
Persson, U.M., and Alpízar, F. (2012). Conditional Cash Transfers and Payments for Environmental Services: A Conceptual Framework for Explaining and Judging Differences in Outcomes. Submitted to World Development. 
Nordén, A., Persson, U.M., and Alpízar, F. (2012). Incentives, Impacts, and Behavioral issues in the context of Payment for Ecosystem Services programs: lessons for REDD+. Forthcoming in Globalization and Development: Rethinking Interventions and Governance, A. Bigsten (Ed.), Routledge Press. 
Alpízar, F., Nordén, A., Pfaff, A., and Robalino, J. (2012). Unintended Consequences of Payment for Environmental Services: Spillovers from Targeting of Deforestation Threat. Working paper.
The Brief can be downloaded here 

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