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Payments for Water Ecosystem Services in Latin America: Evidence from Reported Experience

  • Julia Martin-Ortega
  • Elena Ojea
  • Camille Roux

Payments for Ecosystem Services (PES) schemes are attracting increasing interest as policy mechanisms to improve conservation and sustainable development outcomes. PES initiatives aim to reach mutually beneficial agreements between providers and users of ecosystem services. In Latin America, with Costa Rica as the frontrunner, there are now more than two decades of experience in the implementation of PES schemes, which potentially represent a valuable source of knowledge for the improvement of the efficacy of conservation programs. Reviews and special issues dedicated to the study of PES exist, but they remain to most of their extent descriptive and qualitative. This paper presents the first study that systematically analyses the PES experience on the basis of a descriptive analysis of existing programs. The objective is twofold: (i) understanding the key features of existing PES mechanisms based on reported evidence; and (ii) identifying information needs for evidence-based policy design and implementation. We focus on water-related services since this type of service is involved in the majority of schemes. A database was constructed with 287 observations from 39 studies, from 1984 to 2011 in 10 Latin American countries. We find evidence confirming some known facts, such as deforestation and forest management as the main drivers of PES establishment, and revealing new ones, such as that average income for sellers is 60% larger than average buyers’ payment for the service.

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Paper provided by BC3 in its series Working Papers with number 2012-14.

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Date of creation: Oct 2012
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Publication status: Published
Handle: RePEc:bcc:wpaper:2012-14
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  1. Pagiola, Stefano, 2008. "Payments for environmental services in Costa Rica," Ecological Economics, Elsevier, vol. 65(4), pages 712-724, May.
  2. Gómez-Baggethun, Erik & de Groot, Rudolf & Lomas, Pedro L. & Montes, Carlos, 2010. "The history of ecosystem services in economic theory and practice: From early notions to markets and payment schemes," Ecological Economics, Elsevier, vol. 69(6), pages 1209-1218, April.
  3. 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.
  4. Kosoy, Nicolás & Corbera, Esteve, 2010. "Payments for ecosystem services as commodity fetishism," Ecological Economics, Elsevier, vol. 69(6), pages 1228-1236, April.
  5. Muradian, Roldan & Corbera, Esteve & Pascual, Unai & Kosoy, Nicolás & May, Peter H., 2010. "Reconciling theory and practice: An alternative conceptual framework for understanding payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1202-1208, April.
  6. Muñoz-Piña, Carlos & Guevara, Alejandro & Torres, Juan Manuel & Braña, Josefina, 2008. "Paying for the hydrological services of Mexico's forests: Analysis, negotiations and results," Ecological Economics, Elsevier, vol. 65(4), pages 725-736, May.
  7. 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.
  8. Daniels, Amy E. & Bagstad, Kenneth & Esposito, Valerie & Moulaert, Azur & Rodriguez, Carlos Manuel, 2010. "Understanding the impacts of Costa Rica's PES: Are we asking the right questions?," Ecological Economics, Elsevier, vol. 69(11), pages 2116-2126, September.
  9. Kosoy, Nicolas & Martinez-Tuna, Miguel & Muradian, Roldan & Martinez-Alier, Joan, 2007. "Payments for environmental services in watersheds: Insights from a comparative study of three cases in Central America," Ecological Economics, Elsevier, vol. 61(2-3), pages 446-455, March.
  10. Wunder, Sven & Engel, Stefanie & Pagiola, Stefano, 2008. "Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries," Ecological Economics, Elsevier, vol. 65(4), pages 834-852, May.
  11. Elena Ojea & Julia Martin-Ortega & Aline Chiabai, 2010. "Classifying Ecosystem Services for Economic Valuation: The case of forest water services," Working Papers 2010-12, BC3.
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