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  • WP1413 RL RP PES and MBIs-next of kin or false friends
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Payments for environmental services and market-based instruments: next of kin or false friends?

Working Papers N°14/2013. Iddri, 2013. 16 p.

Un article consacré à la place que tiennent les paiements pour services environnementaux (PSE) dans le champ des instruments de marché pour les services écosystémiques : leur émergence rapide s'est accompagnée d'une certaine diversification, aussi bien dans leur nature que dans les méthodes d'analyse de leurs impacts.

Points clés [en anglais] :

  • A CONFUSED DEBATE ON MARKET-BASED INSTRUMENTS FOR ECOSYSTEM SERVICES

The emergence of market-based instruments (MBIs) in the field of ecosystem services has been spectacular but still lacks a clear conceptualization. Terms are overused and abused in discourses, and contrasted policy instruments are referred to as market-oriented albeit with few characteristics in common. Realities on the ground differ substantially from attractive yet misleading propositions supported by public and private discourses. Both advocates and opponents to these approaches thus propose arguments poorly relying on facts and fueling confusion. Payments for environmental services (PES) have flourished and constitute the emblematic and perfect example of a policy instrument that proves more complex and polymorphous than usually acknowledged. Born from the promises of spontaneous agreements between beneficiaries and providers of services for their mutual interest, it has been viewed by most analysts as a popular MBI. We challenge this view by confronting 73 peer-reviewed articles to a typology of MBIs.

  • PAYMENTS FOR ENVIRONMENTAL SERVICES: FROM ONE UNIFYING CONCEPT TO DIVERGING INSTITUTIONAL ARRANGEMENTS IN PRACTICE

Our analysis of the scientific literature allows us to assess what is a PES according to social scientists: on the one side a negotiated and private bilateral transaction between providers and beneficiaries of services according to the Coasean approach, but also on the other side the continued implementation of national-wide subsidy programs controlled by public authorities. Their institutional arrangements thus exhibit variety rather than a unifying overall model. Besides, scientific literature on PES lacks a more homogeneous and comparable set of research concepts, methodologies and evaluation criteria to inform policies.

  • TOWARDS A BETTER THEORETICAL CHARACTERIZATION OF PAYMENTS FOR ENVIRONMENTAL SERVICES

We argue that MBIs, including PES, as a term encompasses too large an ensemble of policy instruments. Rather, such diverse tools could usefully be split into either genuine market-based instruments with associated characteristics (commodification, market governance, fluidity of exchanges), or other types of policy instruments that exhibit features of monetary transactions (few agents with bilateral governance, usually designed to solve a specific problem). Most often a monetary transaction with poverty alleviation objectives, PES, we contend, clearly remain a bilateral relationship with very little or no feature of market governance or commodification.