Environmental Services

Payments for Environmental Services (PES) are one type of economic incentive for those that manage ecosystems to improve the flow of environmental services that they provide. Generally these incentives are provided by all those who benefit from environmental services, which include local, regional and global beneficiaries. PES is an environmental policy tool that is becoming increasingly important in developing and developed countries.

Four ES types currently stand out:

  1. Carbon sequestration and storage (e.g.a Northern electricity company paying farmers in the tropics for planting and maintaining additional trees);
  2. Biodiversity protection (e.g. conservation donors paying local people for setting aside or naturally restoring areas to create a biological corridor);
  3. Watershed protection (e.g. downstream water users paying upstream farmers for adopting land uses that limit deforestation, soil erosion, flooding risks, etc.);
  4. Landscape beauty (e.g. a tourism operator paying a local community not to hunt in a forest being used for tourists’ wildlife viewing).