Or say an agricultural company wants to turn the forest into a highly profitable oil palm or soy plantation and is willing to compensate the owner of the land handsomely. How do you raise the money to make payments big enough to convince the landowner to join the PES program instead? And how do you ensure that those funds remain available in perpetuity? “You need to have payments horizons that are large enough, because typically, depending on the environmental setting, the problem is not likely to go away just by paying for a couple years,” Wunder said.

What’s more, how do you decide how much to pay each landowner enrolled in the PES program? Do you pay them all equally, or do you weight the payments based on the degree of threat to their land? (A higher threat level often means that the land is also more valuable.) And what do you make those payments contingent upon — the number of trees still standing? The quality of the water at the lower end of the watershed? The population numbers of wildlife harbored on the land? Whatever you choose to tie the payments to, where does the money come from to monitor the effects of the program, and who performs this verification?

Socio-economic outcomes are key

PES is a relatively new conservation strategy, an offshoot of various other mechanisms developed in the past, particularly one called Integrated Conservation and Development Programs (ICDPs). These were also known as “eco-development” or “grassroots conservation” because of their focus on economic development and the needs of local people and communities as much as on environmental conservation. PES is essentially an upgraded, more direct version of ICDPs, which is a big part of the reason why it places a strong emphasis on delivering a variety of socio-economic outcomes, especially reduction of inequality and marginalization of the poor and other disadvantaged groups, like households headed by women.

It’s worth noting that some people are fundamentally against PES, or any market-based conservation mechanism, because they object to the idea of putting a monetary value on nature. These opponents of PES also sometimes argue that paying people to conserve will just discourage them from protecting nature as soon as the payments stop.

Also notable is that many existing PES projects are funded through the UN’s REDD+ program, which was enshrined in the Paris Climate Agreement as a standalone article and aims to channel money from rich nations to the developing world in order to fund efforts to reduce emissions from deforestation and forest degradation. REDD+ also has its detractors, who say it and PES are a form of neocolonialism — a mechanism by which wealthy countries that have already developed their natural resources can pay for their environmental sins by giving poorer countries a relatively small amount of money. Meanwhile, those poorer countries are also denied the economic opportunities they would have if they were free to develop their land however they see fit.

For all of these reasons and more, the very design of a PES program has to consider equitability from beginning to end: in terms of access to the PES scheme, such that everyone has the opportunity to enroll their land if they want to; in terms of decision-making, such that everybody is able to participate and everyone perceives the decision-making process as fair; and in terms of the distribution of outcomes, such that the financial and environmental benefits are distributed across participants in an impartial manner, and this distribution is perceived to be fair.

This forest nursery was founded in the Huamba estate, in Ayabaca, Peru. Local inhabitants produce around 10 thousand seedlings per year. Photo courtesy of Naturaleza y Cultura Internacional – NCI.

When it comes to figuring out whether PES programs work and what characteristics affect their success, perhaps the biggest confounding factor is that every landscape is different, with its own distinct governance structure, system of land tenure, and ecosystem. Just because a particular PES program design works well in one place doesn’t mean it will work in another. That makes it that much more difficult to draw generalizable conclusions from existing research — and yet all the more important to do so.

The body of research examining the effectiveness of PES should ostensibly come into play as decisions are being made on where to create a program and how to design it. Quite a few reviews have looked at how, when, and where PES works. They’re all limited by the number of individual studies that are available, but they have managed to come up with some general points. A recent review (Börner et al. 2017), for instance, found that PES programs financed directly by users rather than by donors tend to achieve better results because of better targeting and stronger enforcement (in both developed and developing countries).

With enough high-quality studies of PES programs in enough parts of the world, you could perhaps start to extrapolate generalized knowledge about the magnitude of effects to be expected from a PES program, but experts tend to agree that the research simply is not there yet.

It’s not that the quantity of research looking at the effectiveness of PES programs isn’t substantial, but that the quality is quite poor, according to Paul Ferraro. “We already know that if you pay people to do things you’ll get at least something,” he said. “Although there are concerns that in the long term you might do more harm than good, or there might be spillovers to areas where you’re not doing payments, by and large the question is not ‘Do payments lead to actions that promote environmental protection,’ but the magnitude. How much? And that’s why the quality of the studies becomes so important, and why there’s such a glaring gap in the literature.”

How we examined the literature

What can we say about PES based on the available scientific literature? To find out, we searched Google Scholar for research on the effectiveness of PES and reviewed the 1,000 most-relevant results (after that the relevance of the search results became so low that it wasn’t worth continuing to sort through them). We found over 100 papers on PES. Thirty-eight of them were actual studies of PES outcomes, so we included them in our analysis. (Read more about our methodology here; you can access all 38 of the studies we reviewed here.)

The vast majority of the evidence in the 38 studies we reviewed was very weak. In other words, most of the studies did not compare areas where PES had been implemented with non-PES control areas or some other kind of countervailing example.

But we did find a number of well-designed studies, which can show how much a particular desired outcome — like avoided deforestation or reforestation goals — was actually improved compared with what was likely to have happened had PES not been implemented. (You can explore all 38 studies we reviewed in more detail via this interactive infographic, which is also embedded below; the most rigorously designed among them are called “Study III” in the pull-down menu that lets you “Select type of evidence.”)

Most of the more-rigorous studies we examined focused on deforestation and forest fragmentation and degradation, most likely because those are the easiest environmental outcomes to measure. The outcomes are also especially suitable to quasi-experimental study design, i.e. studies that also consider scenarios in which the conservation intervention never happened, for example by comparing the study area with very similar nearby non-PES areas, typically via satellite imagery.

There has been one randomized control trial (RCT), led by Seema Jayachandran, an associate professor at Northwestern University in the United States. RCT is essentially the gold standard in terms of study design, but it is pretty uncommon across the conservation sector, mainly because conservation efforts typically aim to protect large areas with highly specific features, like areas that are important for biodiversity conservation. Randomization is therefore not feasible in many cases. (You can read more about RCTs and all of the other evidence types we evaluated here.)

The scientific evidence on payments for ecosystem services (PES)

Do programs that pay local people and communities for conservation efforts yield positive environmental and socio-economic outcomes?


Use the drop down menus to select data from your country of choice or to view data for a particular type of evidence. Click on the name of an outcome (such as animal diversity, or deforestation and degradation) to display data specific to it. Click on a square to see what evidence the outcome is based on. Data visualization by GreenInfo Network. Click here for a full-screen view of this interactive infographic. Database last updated in August 2017. Download data here.

 

The RCT study took place in Uganda and involved 121 villages in a region in the western part of the country with high rates of deforestation and forest degradation. Sixty of the villages were paid by the hectare to conserve their forests; 61 villages that were not paid served as a control group. Jayachandran and her co-authors estimated that the two-year program cut deforestation rates in half, and found no evidence that the enrollees shifted tree-cutting activities to other forests.

“I think CO2 benefits are probably what’s going to get this kind of policy funded, if it scales up. But the Ugandan government’s motivation was really about protecting chimpanzees,” Jayachandran told Mongabay. “There’s some natural reserves in Uganda and there’s this forest corridor connecting them that was privately owned and that forest corridor has gotten degraded over time. That’s precisely where we did our study.”

Participants in a PES program in Uganda receiving their payments. Photo courtesy of Chimpanzee Sanctuary and Wildlife Conservation Trust.

In an essay appearing in a book published this week by Oxford University Press, Paul Ferraro wrote of the Uganda program that “Although the evidence for positive effects on household income or borrowing was weak, a cost-benefit analysis of the program suggests the program was cost-effective and could be improved.” He added that, “Because it was deliberately designed to generate evidence about impacts, the Uganda program is an exemplar for future PES programs.”

Studies of the social impacts of PES focused mostly on equality and marginalization, and almost none had a design rigorous enough to demonstrate that the observed social changes were due to the implementation of a PES program. (These studies were mostly classified in the interactive graphic as “Case reports,” which can be thought of as anecdotal evidence that has been peer-reviewed.)

Very few studies evaluated economic profitability of PES for households. Those that did mostly calculated whether opportunity costs were met (in other words, whether the participants received an amount of money that they believed was equal to the value they could have gotten from any other potential use of their land), and whether cash payments were actually distributed to the participants.

Overall, there is no strong evidence for how big of an impact PES can have on the environment and human welfare, though there is some evidence of modest effects on reducing deforestation. But as Paul Ferraro points out, it’s important to remember that there are no rigorous impact evaluation studies showing PES increases environmental damage or decreases human welfare, either.

“Compared to alternative voluntary approaches like certification, community forest management, alternative livelihoods, it’s not been shown to be any worse,” Ferraro told Mongabay. “And theoretically it has a lot of desirable attributes: it’s low complexity compared to some of these other programs, easier to target in time and space, and you have this ability to tie investments more directly to outcomes. I’m still positive on PES in terms of my outlook, in terms of it being an important tool for conservation. I just lament the fact that two decades after we really started using it with greater frequency, we’re still debating the same questions we were 20 years ago.”

Our review of the evidence did actually turn up a couple instances in which PES programs were associated with negative environmental or socio-economic outcomes. But this evidence of negative outcomes was limited and is not broadly applicable to PES as a whole. All in all, our findings generally support Ferraro’s assertion, as we found no strong evidence that PES might actually make things worse except in very specific circumstances.

The Verdict: Environmental outcomes

Most of the 38 studies we reviewed found that the PES schemes they examined were modestly effective at reducing deforestation (and forest fragmentation and degradation), boosting reforestation efforts, and increasing forest carbon stocks.

The key question, however, is how much those PES schemes improved those environmental outcomes, and that is much harder to come up with any reasonable estimate for.

Take, for example, just one variable, such as deforestation. The units of measurement and the spatial and temporal scales of the PES programs and the countervailing examples they’re being compared to are so vastly different across studies that it’s extremely challenging to even make comparisons between findings, let alone easily characterize the collective results. Also, some studies don’t account for leakage (also called slippage or the substitution effect, which is when landowners shift an environmentally harmful activity from a parcel of land that is enrolled in the program to another parcel of their land that is not enrolled) or spillover (also called negative slippage, when landowners enroll part of their land in a PES program and then and then stop environmentally harmful activities on their remaining land, too). Even among studies that do account for leakage and spillover, there are several different methodologies for doing so.

On average, the more rigorously designed studies showed very modest reductions in deforestation, generally of just a few percentage points. Indeed, most of the time, the more rigorous the design was, the smaller the impact the study found.

This low level of additionality (the effects found to have been created by the PES program in addition to what would have happened anyway without conservation efforts) was often due to the fact that the country’s deforestation rate was already declining, or to less-than-ideal targeting of PES initiatives, which led to many people who would not have deforested their land anyway participating in the programs.

Our review found much more murky evidence for effects on biodiversity. In some cases, both animal and plant diversity were found to have declined following PES implementation. Most of these negative outcomes were found in China (Hua et al. 2016) and were associated with the largest PES reforestation scheme in the world, the Grain for Green program. This program often involves planting monoculture tree plantations or non-native species, both of which can negatively impact wildlife abundance. Very little evidence on the biodiversity impacts of PES comes from outside of China. But it’s probably fair to expect to see negative outcomes almost anywhere else in the world where reforestation is done through planting monoculture plantations. In other words, when PES activities involve reforestation, the evidence from China shows that it should not be a monoculture plantation.

A decent number of studies found positive outcomes for hydrological services, but these were often perceived improvements in water quality and quantity, not measured outcomes. Moreover, several researchers note that the links between forest cover and water quantity and quality are complex and not very well understood. These links also vary greatly between different types of forest.

It’s the locally specific information that is most needed, and most lacking, when designing and implementing a PES program, according to Verónica Gálmez, a policy dialogue coordinator with the NGO Helvetas who is based in Peru.

“The main barrier, the main bottleneck, is related to the specific conditions of the local landscape when trying to design a PES scheme,” Gálmez told Mongabay. Gálmez has worked on a number of PES programs throughout the Andean region of South America, mostly aimed at the provision of hydrological services. “You can have the tools, you can have toolboxes and guidelines in a very general way, but the main and key bottleneck is the lack of data and information related to climate and water behavior at the local level, at the watershed level.”

Making these data constraints even more difficult to navigate is the number of institutions and stakeholders involved in the design and implementation of any given PES scheme, including local communities, NGOs, donors, and local, regional, and national governments. “You need long-term data and that’s what we are lacking now. You need a lot of cross-sectoral and inter-institutional coordination to identify which type of institution holds which kinds of data if you really want to implement these kinds of initiatives,” Gálmez said.

The Verdict: Socio-economic outcomes

There are a number of different ways to measure equality, equity, and marginalization. Most studies looked at whether the poorest or most marginalized members of society were able to participate in the PES program that was being implemented.

Many people do not own land to enroll, of course, while others might own just a small piece of land that is their only source of subsistence or income. We found that many PES schemes, especially newer ones, are carefully designed to be accessible to the poorest members of society. But the majority of the evidence shows little to no improvement in terms of equality. (It’s worth noting, though, that many schemes and/or the researchers examining them set ambitious targets of lifting everybody from poverty, or making all parts of society more equal.)

In most cases, payments were found to have been successfully distributed to the participants, whether these were individual households or whole communities. The payments were often perceived to be too low, or were not always paid out in full, as was the case in a few instances in China. One prominent case where payments did not get properly dispersed to all participants was in Vietnam (To et al. 2012). Though that study constituted very weak evidence, mostly based on project documents and non-quantitative observations, it does raise an important point, which is that local power dynamics must be taken into account when implementing a PES program — there might be some places where it’s impossible to avoid local elites capturing all the benefits.

Agricultural plots amid the forest in Hoima district, Uganda. Photo by Megan Kearns.

The majority of the available evidence suggests that payments were often too low to cover the opportunity costs of not using the land for agricultural development or other profitable activities. Even in some cases where the opportunity costs were covered, participants still perceived the payments to be too low. Interestingly, there were some cases where payments were not high enough to cover opportunity costs, or payments were otherwise perceived to be too low, but participants still re-enrolled in the program after the first contract period expired, or indicated that they planned to re-enroll.

Many researchers noted the importance of clarifying land tenure during the process of enrolling participants in a PES program (Asquith et al. 2008, Arriagada et al. 2015, Grieg-Gran et al. 2005). Having an official certificate proving title to the land was sometimes seen by participants as the most important benefit, making them perceive the program as worth taking part in even if they thought payments were too low. But there were also instances where the lack of an official document proving land tenure prevented some households from joining programs.

There’s even some evidence that people found participation in the programs to be worthwhile despite perceiving payments as being too low simply because of their desire to conserve their land and their pride in having contributed to conservation efforts.

How do we fill the gaps in our knowledge?

So what’s needed to fill the gaps in our knowledge about the effectiveness of PES?

“My prescription is, every time there’s a new PES program, or a scaling up of an existing program, it should be done in a way that allows us to draw conclusions about the overall impact or some element of it,” Johns Hopkins University’s Paul Ferraro said, “like targeting versus not targeting; more frequent payments versus less frequent; longer contract, shorter; tying the payments to actions versus tying it to environmental outcomes. These are questions that have been in the literature since the 90s, since I started working on this, and they don’t have good answers. We’re not going to be able to make these programs effective if we don’t have answers to what mechanisms and moderators are important in making PES impactful for both the environment and people.”

Of course it would be ideal to have as many randomized control  trial (RCT) studies as possible in order to show the clearest possible evidence of whether or not PES programs lead directly to their desired outcomes. But there’s a good reason why so few RCT studies are done on conservation initiatives. Northwestern University’s Seema Jayachandran has done a number of RCTs in various domains, including health and education. “I do think it’s more challenging for conservation topics than some health ones,” she said. “One being the geography you need, the idea of a landscape, and having enough landscapes or enough units within a landscape that it’s meaningful to implement a program.”

You also can’t randomize as easily across people when designing a PES program, Jayachandran added. “You know, there might be somebody thinking about improving child health in every single village in the world, but PES is only appropriate in certain areas. So I think there are challenges for this compared to other fields of public policy where it’s much more common to have randomized control trials.”

It may be difficult to prove as yet, but the general consensus is that PES is a promising conservation strategy with room to improve. “I’m generally an optimist about how this tool can work, and I think the more results we get the more evidence points in the direction that some areas where this is done well, it can work to the benefit of the environment and at the same time be fair enough,” CIFOR’s Sven Wunder told Mongabay. “It’s much fairer than doing a protected area or forest law restrictions where people just suffer the opportunity costs. The landowners on the ground are being compensated, they’re being part of the decision-making. But I think we need to have much more evidence to learn exactly in what contexts it can work in the desired way.”

Both Wunder and Ferraro contributed to a recent PLOS ONE collection of studies on forest conservation impacts. “[S]cientists including myself compared the impacts across different policy instruments and found that PES effectiveness actually fared quite well,” Wunder wrote in a blog post for CIFOR.

There is no centralized database of PES projects, which would be useful. Another clear need in order to improve PES and demonstrate its efficacy is more data, more evidence — and lots of it.

“We need more experiments, and also experiments that not only just test ‘does it work,’ but how variations in the way we do it affect the outcomes, how conditional they are, what is the money tied to, are they targeted or untargeted,” Ferraro said. “These things have just been debated endlessly in the literature based on theory and anecdote and poor, non-experimental analyses. Every time we start a new PES program that’s not implemented with some experimental variation, it’s an opportunity lost.”

CITATIONS

  • Börner, J., Baylis, K., Corbera, E., Ezzine-de-Blas, D., Ferraro, P. J., Honey-Rosés, J., … & Wunder, S. (2016). Emerging evidence on the effectiveness of tropical forest conservation. PloS one, 11(11), e0159152. doi:10.1371/journal.pone.0159152
  • Börner, J., Baylis, K., Corbera, E., Ezzine-de-Blas, D., Honey-Rosés, J., Persson, U. M., & Wunder, S. (2017). The effectiveness of payments for environmental services. World Development, 96, 359-374. doi:10.1016/j.worlddev.2017.03.020
  • Ferraro, P. J. (2017). In Press. Are payments for ecosystem services benefiting the ecosystems and people? In Effective Conservation Science: Data not Dogma, Kareiva, P., Marvier, M., & Silliman B. (eds.). Oxford University Press, pp.159-166. doi:10.1093/oso/9780198808978.003.0025
  • Jayachandran, S., de Laat, J., Lambin, E. F., Stanton, C. Y., Audy, R., & Thomas, N. E. (2017). Cash for carbon: A randomized trial of payments for ecosystem services to reduce deforestation. Science, 357(6348), 267-273. doi:10.1126/science.aan0568

For a complete list of references, click here.

Writer: Mike Gaworecki, Researcher: Zuzana Burivalova
Editor: Rebecca Kessler
Infographic: Zuzana Burivalova, GreenInfo Network

Banner photograph of men, women, boys, and girls participating in the communal tasks (mingas) of a reforestation and recovery initiative in a degraded zone of Ayabaca, Piura, Peru. Photo Credit: Naturaleza y Cultura Internacional – NCI.

This is part two in the Mongabay series Conservation Effectiveness, read the others in the series here.

Follow Mike Gaworecki on Twitter: @mikeg2001

Article published by Mike Gaworecki
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