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Determining when payments are an effective policy approach to ecosystem service provision

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  • Kemkes, Robin J.
  • Farley, Joshua
  • Koliba, Christopher J.

Abstract

There are several policy tools available for the provision of ecosystem services. The economic characteristics of the ecosystem service being provided, such as rivalry and excludability, along with the spatial scale at which benefits accrue can help determine the appropriate policy approach. In this paper we provide a brief introduction to ecosystem services and discuss the policy tools available for providing them along with the dimensions, political feasibility and appropriateness of each tool. Throughout the paper we focus primarily on payments as a mechanism for ecosystem service provision. We present a framework for determining the characteristics of an ecosystem service and when payments are a viable policy tool option based on the characteristics. Additionally, we provide examples of when payments do not provide a socially desirable level of ecosystem benefits. We conclude with a summary of policy recommendations, specifically desirable property rights and payment types based on the particular classification of an ecosystem service. We also discuss the advantages of creating monopsony power to reduce transaction costs, delineating and bundling ecosystem services and utilizing existing intermediaries.

Suggested Citation

  • Kemkes, Robin J. & Farley, Joshua & Koliba, Christopher J., 2010. "Determining when payments are an effective policy approach to ecosystem service provision," Ecological Economics, Elsevier, vol. 69(11), pages 2069-2074, September.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:11:p:2069-2074
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    References listed on IDEAS

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    1. Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
    2. Wunder, Sven & Albán, Montserrat, 2008. "Decentralized payments for environmental services: The cases of Pimampiro and PROFAFOR in Ecuador," Ecological Economics, Elsevier, vol. 65(4), pages 685-698, May.
    3. Asquith, Nigel M. & Vargas, Maria Teresa & Wunder, Sven, 2008. "Selling two environmental services: In-kind payments for bird habitat and watershed protection in Los Negros, Bolivia," Ecological Economics, Elsevier, vol. 65(4), pages 675-684, May.
    4. Turpie, J.K. & Marais, C. & Blignaut, J.N., 2008. "The working for water programme: Evolution of a payments for ecosystem services mechanism that addresses both poverty and ecosystem service delivery in South Africa," Ecological Economics, Elsevier, vol. 65(4), pages 788-798, May.
    5. Reynolds, Travis W. & Farley, Joshua & Huber, Candice, 2010. "Investing in human and natural capital: An alternative paradigm for sustainable development in Awassa, Ethiopia," Ecological Economics, Elsevier, vol. 69(11), pages 2140-2150, September.
    6. Turnbull, Geoffrey K., 2004. "Development moratoria," Journal of Housing Economics, Elsevier, vol. 13(3), pages 155-169, September.
    7. Hein, Lars & van Koppen, Kris & de Groot, Rudolf S. & van Ierland, Ekko C., 2006. "Spatial scales, stakeholders and the valuation of ecosystem services," Ecological Economics, Elsevier, vol. 57(2), pages 209-228, May.
    8. Turner, R. Kerry & Paavola, Jouni & Cooper, Philip & Farber, Stephen & Jessamy, Valma & Georgiou, Stavros, 2003. "Valuing nature: lessons learned and future research directions," Ecological Economics, Elsevier, vol. 46(3), pages 493-510, October.
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    Citations

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    Cited by:

    1. Galati, Antonino & Crescimanno, Maria & Gristina, Luciano & Keesstra, Saskia & Novara, Agata, 2016. "Actual provision as an alternative criterion to improve the efficiency of payments for ecosystem services for C sequestration in semiarid vineyards," Agricultural Systems, Elsevier, vol. 144(C), pages 58-64.
    2. repec:eee:ecolec:v:140:y:2017:i:c:p:110-122 is not listed on IDEAS
    3. Remme, Roy P. & Edens, Bram & Schröter, Matthias & Hein, Lars, 2015. "Monetary accounting of ecosystem services: A test case for Limburg province, the Netherlands," Ecological Economics, Elsevier, vol. 112(C), pages 116-128.
    4. Smith, Helen F. & Sullivan, Caroline A., 2014. "Ecosystem services within agricultural landscapes—Farmers' perceptions," Ecological Economics, Elsevier, vol. 98(C), pages 72-80.
    5. Karlsson-Vinkhuyzen, Sylvia I. & Jollands, Nigel & Staudt, Lawrence, 2012. "Global governance for sustainable energy: The contribution of a global public goods approach," Ecological Economics, Elsevier, vol. 83(C), pages 11-18.
    6. García-Amado, Luis Rico & Pérez, Manuel Ruiz & Escutia, Felipe Reyes & García, Sara Barrasa & Mejía, Elsa Contreras, 2011. "Efficiency of Payments for Environmental Services: Equity and additionality in a case study from a Biosphere Reserve in Chiapas, Mexico," Ecological Economics, Elsevier, vol. 70(12), pages 2361-2368.
    7. 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.
    8. repec:spr:masfgc:v:23:y:2018:i:2:d:10.1007_s11027-016-9721-0 is not listed on IDEAS
    9. Kaczan, David & Swallow, Brent M. & Adamowicz, Wiktor L., 2011. "Payment for Ecosystem Services (PES) scheme design in rural Tanzania: Famers’ preferences for enforcement and payment options," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103673, Agricultural and Applied Economics Association.
    10. repec:eee:ecolec:v:139:y:2017:i:c:p:75-90 is not listed on IDEAS
    11. repec:wsi:jeapmx:v:19:y:2017:i:01:n:s146433321750003x is not listed on IDEAS
    12. Coria, Jessica & Robinson, Elizabeth & Smith, Henrik G. & Sterner, Thomas, 2012. "Biodiversity Conservation and Ecosystem Services Provision: Tale of Confused Objectives, Multiple Market Failures and Policy Challenges," Working Papers in Economics 546, University of Gothenburg, Department of Economics.
    13. Farley, Joshua & Costanza, Robert, 2010. "Payments for ecosystem services: From local to global," Ecological Economics, Elsevier, vol. 69(11), pages 2060-2068, September.
    14. Rival, Laura, 2010. "Ecuador's Yasuní-ITT Initiative: The old and new values of petroleum," Ecological Economics, Elsevier, vol. 70(2), pages 358-365, December.
    15. Kaczan, David & Swallow, Brent M. & Adamowicz, W.L. (Vic), 2013. "Designing a payments for ecosystem services (PES) program to reduce deforestation in Tanzania: An assessment of payment approaches," Ecological Economics, Elsevier, vol. 95(C), pages 20-30.

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