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Payment for Ecosystem Services from Forests

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  • Alix-Garcia, Jennifer

    (University of Wisconsin-Madison)

  • Wolff, Hendrik

    (Simon Fraser University)

Abstract

Every year between 2000 and 2010, our planet lost native forests roughly the size of Costa Rica. (FAO, 2010). This rapid deforestation has dramatically changed the chemical composition of the world's atmosphere, the level of biodiversity, and the presence of vegetation key to maintaining watershed function and preventing landslides. There has been a boom in the design of local and international policy instruments to prevent further deforestation and encourage forest growth. This paper reviews the theory and evidence surrounding forest-related Payment for Ecosystem Services (PES) schemes intended to slow and reverse deforestation. We cover the most recent work touching on a range of issues related to PES programs, including research on targeting, contract design, environmental effectiveness, challenges to program implementation, spillovers, and distributional considerations of conditional cash transfers. We also highlight areas of potential future research.

Suggested Citation

  • Alix-Garcia, Jennifer & Wolff, Hendrik, 2014. "Payment for Ecosystem Services from Forests," IZA Discussion Papers 8179, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8179
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    More about this item

    Keywords

    conditional cash transfers; climate change; reforestation; afforestation; deforestation; environmental policy; PES;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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