IDEAS home Printed from https://ideas.repec.org/a/anr/reseco/v5y2013p139-159.html
   My bibliography  Save this article

Payment for Environmental Services: Hypotheses and Evidence

Author

Listed:
  • Lee J. Alston

    (Institute of Behavioral Science, University of Colorado, Boulder, Colorado 80309
    Department of Economics, University of Colorado, Boulder, Colorado 80309
    National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Krister Andersson

    (Institute of Behavioral Science, University of Colorado, Boulder, Colorado 80309
    Department of Political Science, University of Colorado, Boulder, Colorado 80309
    Centro de Investigación Sociedad y Políticas Públicas, Universidad de los Lagos, Santiago 8370321, Chile)

  • Steven M. Smith

    (Institute of Behavioral Science, University of Colorado, Boulder, Colorado 80309
    Department of Economics, University of Colorado, Boulder, Colorado 80309)

Abstract

The use of payment for environmental services (PES) is not a new type of contract, but PES programs have become more in vogue because of the potential for sequestering carbon by paying to prevent deforestation and degradation of forestlands. We provide a framework utilizing transaction costs to hypothesize which services are more likely to be provided effectively. We then interpret the literature on PES programs to see the extent to which transaction costs vary as predicted across the type of service and to assess the performance of PES programs. As predicted, we find that transaction costs are the least for club goods like water and greatest for pure public goods like carbon reduction. Actual performance is difficult to measure and varies across the examples. More work and experimentation are needed to gain a better outlook on what elements support effective delivery of environmental services.

Suggested Citation

  • Lee J. Alston & Krister Andersson & Steven M. Smith, 2013. "Payment for Environmental Services: Hypotheses and Evidence," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 139-159, June.
  • Handle: RePEc:anr:reseco:v:5:y:2013:p:139-159
    as

    Download full text from publisher

    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-091912-151830
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chervier, Colas & Costedoat, Sébastien, 2017. "Heterogeneous Impact of a Collective Payment for Environmental Services Scheme on Reducing Deforestation in Cambodia," World Development, Elsevier, vol. 98(C), pages 148-159.
    2. Campanhão, Ligia Maria Barrios & Ranieri, Victor Eduardo Lima, 2019. "Guideline framework for effective targeting of payments for watershed services," Forest Policy and Economics, Elsevier, vol. 104(C), pages 93-109.
    3. Bennett, Drew E. & Gosnell, Hannah, 2015. "Integrating multiple perspectives on payments for ecosystem services through a social–ecological systems framework," Ecological Economics, Elsevier, vol. 116(C), pages 172-181.
    4. Andersson, Krister P. & Smith, Steven M. & Alston, Lee J. & Duchelle, Amy E. & Mwangi, Esther & Larson, Anne M. & de Sassi, Claudio & Sills, Erin O. & Sunderlin, William D. & Wong, Grace Y., 2018. "Wealth and the distribution of benefits from tropical forests: Implications for REDD+," Land Use Policy, Elsevier, vol. 72(C), pages 510-522.
    5. Ward, Patrick S. & Mapemba, Lawrence & Bell, Andrew R., 2021. "Smart subsidies for sustainable soils: Evidence from a randomized controlled trial in southern Malawi," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    6. Cloé Garnache & Scott M. Swinton & Joseph A. Herriges & Frank Lupi & R. Jan Stevenson, 2016. "Solving the Phosphorus Pollution Puzzle: Synthesis and Directions for Future Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1334-1359.
    7. Fauzi, Akhmad & Anna, Zuzy, 2013. "The complexity of the institution of payment for environmental services: A case study of two Indonesian PES schemes," Ecosystem Services, Elsevier, vol. 6(C), pages 54-63.
    8. Saint-Cyr, Legrand D.F. & Védrine, Lionel & Legras, Sophie & Le Gallo, Julie & Bellassen, Valentin, 2023. "Drivers of PES effectiveness: Some evidence from a quantitative meta-analysis," Ecological Economics, Elsevier, vol. 210(C).
    9. Martin, Paul V., 2018. "Managing the risks of ecosystem services markets," Ecosystem Services, Elsevier, vol. 29(PB), pages 404-410.
    10. Gary D. Libecap, 2014. "Addressing Global Environmental Externalities: Transaction Costs Considerations," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 424-479, June.
    11. Sandi Matsumoto & Melissa M. Rohde & Sarah Heard, 2019. "Policy Note: "Economic Tools to Achieve Groundwater Sustainability for Nature: Two Experimental Case Studies from California"," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-15, October.
    12. Ola, Oreoluwa & Menapace, Luisa & Benjamin, Emmanuel & Lang, Hannes, 2019. "Determinants of the environmental conservation and poverty alleviation objectives of Payments for Ecosystem Services (PES) programs," Ecosystem Services, Elsevier, vol. 35(C), pages 52-66.
    13. Hao Wang & Sander Meijerink & Erwin van der Krabben, 2020. "Institutional Design and Performance of Markets for Watershed Ecosystem Services: A Systematic Literature Review," Sustainability, MDPI, vol. 12(16), pages 1-26, August.
    14. Li, Zhi & Liu, Pengfei & Swallow, Stephen K., 2022. "The performance of multi-type environmental credit trading markets: Lab experiment evidence," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    15. Chabé-Ferret, Sylvain & Voia, Anca, 2019. "Are Grassland Conservation Programs a Cost-Effective Way to Fight Climate Change? Evidence from France," SocArXiv cx8j6, Center for Open Science.
    16. Do, Trong Hoan & Vu, Tan Phuong & Nguyen, Van Truong & Catacutan, Delia, 2018. "Payment for forest environmental services in Vietnam: An analysis of buyers’ perspectives and willingness," Ecosystem Services, Elsevier, vol. 32(PA), pages 134-143.
    17. Benra, F. & Nahuelhual, L. & Felipe-Lucia, M. & Jaramillo, A. & Jullian, C. & Bonn, A., 2022. "Balancing ecological and social goals in PES design – Single objective strategies are not sufficient," Ecosystem Services, Elsevier, vol. 53(C).
    18. Teo Dang Do & Anchana NaRanong, 2019. "Livelihood and Environmental Impacts of Payments for Forest Environmental Services: A Case Study in Vietnam," Sustainability, MDPI, vol. 11(15), pages 1-22, August.

    More about this item

    Keywords

    REDD+; transaction costs; property rights;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:reseco:v:5:y:2013:p:139-159. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: http://www.annualreviews.org (email available below). General contact details of provider: http://www.annualreviews.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.