Payments for ecosystem services and landowner interest: Informing program design trade-offs in Western Panama

Experience with payments for ecosystem services (PES) highlights the effects of program design on landowner participation, impacting the program's ability to achieve environmental and, where applicable, social objectives. We conducted an exploratory study in western Panama at the initial stage of PES consideration to identify potential landowner interest in PES and factors that would affect landowner interest and eligibility. We report the results from a household survey of 344 farmers and ranchers (92% response rate). Eighty percent of the respondents expressed interest in PES participation. Respondents' stated interest was significantly related to farm size, income, age, land tenure, and previous involvement in conservation. We also found that alternative specifications for landowner eligibility requirements, targeting criteria, and other parameters could greatly affect landowners' ability to participate, most strongly for respondents lower in socioeconomic status. We provide a framework for exploring potential landowner interest in PES at the very first stage of program exploration, from which program design can be strategically advanced with realistic PES scenarios to explore efficient payment levels and projected environmental benefits. Our findings highlight the importance of making explicit trade-offs that result from alternative PES design choices in affecting landowners' interest and eligibility to participate.