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Questioning the theory of Payments for Ecosystem Services (PES) in light of emerging experience and plausible developments

Romain Pirard; Raphaël Billé
Analyses N°04/2010. Iddri, 2010. 24 p.
Highlights :
  • A PROMINENT TOOL FOR CONSERVATION
    Payments for Environmental Services (PES) are emerging in the wave of increased attention to environmental services as contributors to economic activities. The underlying principle is based on contractual payments to users of a natural resource, such payments being subject to the condition that they maintain a pre-defined environmental service.
  • THE NATURE OF SELLERS IS FUNDAMENTAL
    Sellers may be traditional users of the resource (e.g. local populations with ancient rights) or "professional" (e.g. industrial companies operating with public licenses). In the latter case, the exception made to the polluter pays principle is at least subject to debate. Not only for equity reasons, but also for avoiding a dangerous shift towards a "polluter benefits principle".
  • CONTRASTING APPROACHES TO PES
    PES can lead to the cessation of activities when payments are strictly conditional to the end of environmental degradation (e.g. forest conservation). These "use-restricting" PES are quite transitory and flexible because payments may be halted anytime. In contrast, "asset-building" PES aim at changing practices (e.g. fertilizers-free agriculture). The latter seem to be more ambitious in terms of initial costs with required investments and training, but offer better prospects for long-term effectiveness.
  • AMBIGUOUS LINKS WITH PUBLIC POLICIES
    PES are in principle substituting to public action by giving priority to voluntary contracts between beneficiaries and "providers" of an environmental service. If implemented on a large-scale, they carry the risk to deter reforms in the environment field and to actually reverse the polluter pays principle (the beneficiary would pay, not the polluter). These risks need special attention in developing countries with weak institutions.
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