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Payments for Ecosystem Services and Wealth Distribution

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  • Wang, Pu
  • Poe, Gregory L.
  • Wolf, Steven A.

Abstract

Payment for ecosystem services (PES) has come to be regarded as a promising market-based policy instrument to internalize environmental externalities. The potential of PES is linked to the relationship between the willingness to pay (WTP) of ecosystem service buyers and the willingness to accept (WTA) of ecosystem service providers. This study uses an economic model to analyze factors that influence aggregate WTP and WTA in a PES scheme. We demonstrate that wealth disparity between ecosystem services buyers and providers can increase transactions. Furthermore, when wealth disparity exists between the buyers and sellers, the wealthier population would contribute more into the program and the poorer population would benefit more from it. Under these conditions, PES can be socially progressive and mitigate preexisting economic inequality. In this sense, the economic model provides justification for integration of PES and poverty alleviation programs. Results of our study indicate that PES is not a universally applicable conservation tool, and there is a need for a more targeted approach to the design and application of PES.

Suggested Citation

  • Wang, Pu & Poe, Gregory L. & Wolf, Steven A., 2017. "Payments for Ecosystem Services and Wealth Distribution," Ecological Economics, Elsevier, vol. 132(C), pages 63-68.
    • Handle: RePEc:eee:ecolec:v:132:y:2017:i:c:p:63-68
    DOI: 10.1016/j.ecolecon.2016.10.009
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    2. Li Yang & Guanghua Qiao, 2023. "Grassland Ecological Compensation, Income Level and Policy Satisfaction: An Empirical Analysis Based on a Survey of Herders in Ecological Protection Redline Areas," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    3. Behnoosh Abbasnezhad & Jesse B. Abrams & Jeffrey Hepinstall-Cymerman, 2023. "Incorporating Social and Policy Drivers into Land-Use and Land-Cover Projection," Sustainability, MDPI, vol. 15(19), pages 1-18, September.
    4. Manman Han & Min Song, 2020. "Quantifying Ecological Well-Being Loss under Rural–Urban Land Conversion: A Study from Choice Experiments in China," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    5. Chunci Chen & Guizhen He & Yonglong Lu, 2022. "Payments for Watershed Ecosystem Services in the Eyes of the Public, China," Sustainability, MDPI, vol. 14(15), pages 1-20, August.
    6. Randrianarison, Henintsoa & Ramiaramanana, Jeannot & Wätzold, Frank, 2017. "When to Pay? Adjusting the Timing of Payments in PES Design to the Needs of Poor Land-users," Ecological Economics, Elsevier, vol. 138(C), pages 168-177.
    7. Zheng, Shiming & Yao, Rongrong & Zou, Ke, 2022. "Provincial environmental inequality in China: Measurement, influence, and policy instrument choice," Ecological Economics, Elsevier, vol. 200(C).
    8. Sheng, Jichuan & Wang, Hui, 2022. "Participation, income growth and poverty alleviation in payments for ecosystem services: The case of China's Wolong Nature Reserve," Ecological Economics, Elsevier, vol. 196(C).
    9. Šaszkiewicz, Edyta & Kronenberg, Jakub & Marcińczak, Szymon, 2018. "Attached to or bound to a place? The impact of green space availability on residential duration: The environmental justice perspective," Ecosystem Services, Elsevier, vol. 30(PB), pages 309-317.

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