Money alone not enough to sustain environmental payment schemes, study finds

Research finds 'soft variables' such as rights and participation are just as significant as money transfers.
A new study suggests that money alone can’t buy success for Payment for Ecosystem Services schemes.

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BOGOR, Indonesia — On paper, it is a simple premise: Improve environmental management by financially rewarding the people responsible for conservation.

This concept, known as payment for ecosystem services (PES, for short), has won many supporters among policymakers desperate to achieve tangible ecological benefits with tight budgets. PES schemes are now used globally, to incentivize conservation of valuable watersheds, endangered species and threatened forests.

But as with any paradigm, reality is more complex — and money alone can’t buy success, a new study suggests.

In a recent paper in the journal BioScience, “Social Equity Matters in Payment for Ecosystem Services,” the authors argue that a narrow focus on efficiency and maximizing conservation budgets can actually come at a steep cost for conservation.

The study, led by researchers at the Basque Center for Climate Change and the Center for International Forestry Research (CIFOR) and supported by the European Union EcoFINDERS project, highlights emerging tensions between efficiency and equity in the design of PES schemes. The authors argue that social equity dimensions — including the ability to participate in and shape schemes, the recognition of diverse local rights, and the fair distribution of costs and benefits — are often overlooked in the design.

However, broad evidence suggests that these social factors are important, not only for moral reasons, but for practical reasons as well. Social equity can have long-term impacts on both ecological outcomes and project costs.

“Social equity is increasingly thought about in conservation, yet is often divorced from PES,” said study co-author Jacob Phelps, a CIFOR scientist. “The market-efficiency-payment logic that underlies most PES has a particular potential to obscure equity dimensions. As PES is quickly up-scaled across countries and ecosystems, there is growing need to consider how equity dimensions shape their design and outcomes.”


The paper asserts that “equity-blind” PES can result in negative feedbacks that can undermine long-term conservation goals. Conversely, the authors point to evidence that schemes that integrate equity considerations can benefit from positive feedbacks. The paper highlights a wide range of emerging examples that illustrate these complexities:

  • The authors note negative feedback as the result of inadequate appreciation of social equity in the design of PES schemes for Reducing Emissions from Deforestation and Degradation (REDD+). In Ecuador, many indigenous communities — on whose land more than 60 percent of remaining forest is located — have opposed these PES schemes, which were recently documented to have suffered from poor communication, lack of community involvement in decision making, and a long-term mistrust of government programs.
  • The authors also highlight positive equity feedbacks. They discuss a study in  Rwanda’s Nyungwe National Park, which considered PES schemes developed through community consultations,  about issues including indicators, targets and payment distribution, which varied across sites. The study found that in areas where equity considerations were emphasized, hunting and tree-cutting were reduced compared with “fence-and-fine” areas. Areas subject to strict policing of park regulations showed similar reductions in violations. However, in the areas where social equity was emphasized, people also had a more positive attitude toward forest management, suggesting the rules will be more sustainable than in areas managed through enforcement alone.

“When social equity is included into PES planning, it is often interpreted to mean only the distribution of benefits, that is, who do we pay for this conservation action,” Phelps said.

“That is important, but neglects other equity dimensions, such as recognition of rights, distribution of burdens, participation, and people’s ability to engage.  These ‘soft variables’ may seem tangential to our pressing conservation goals, but evidence suggests that they are really important to shaping outcomes — how people feel, relate, engage matters in very tangible ways.”

The authors explain that this has profound implications for environmental policies, especially those that might anticipate that using payments and incentives might somehow simplify scheme design.

The authors call for efforts to “rescue equity in an era of efficiency” by ensuring that PES schemes look beyond efforts to maximize conservation budgets over the short-term. This would necessitate participatory PES scheme design and decision-making that engages the various stakeholders that use and manage target landscapes, as well as a broadened appreciation for the diverse values and identities attached to ecosystems.  The authors conclude that this requires both binding social and environmental safeguards, as well as recognition that social equity is central to PES function.

Yet, the authors recognize that integrating equity considerations into conservation planning has upfront costs, proposing research on possible trade-offs between effectiveness, efficiency and social equity at different scales and under different conditions.  In particular, they recognize the need to determine when and how equity-conscious design can improve outcomes, while potentially offering net economic paybacks.

For further information on the topics of this research, please contact Jacob Phelps at

This study forms part of the CGIAR Research Program on Forests, Trees and Agroforestry.

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Topic(s) :   REDD+ Community forestry Rights