PES: Payments for ecosystem services and poverty alleviation?

Payments for ecosystem services (PES) is an incentives-based governance instrument frequently promoted as a means to achieve win-wins for ecosystems and wellbeing. PES is often conceptualised as a market-oriented approach wherein an ecosystem service is ‘bought’ (cash or in-kind) from an ecosystem service provider contingent upon provision of that service. This chapter explores how the definitions of PES have evolved and changed over time, whether the PES projects have delivered the promised win-wins, and other issues related to PES such as power, equity and justice, and summarises the key lessons learned. Although counterfactual evidence and impact evaluations of PES are limited in number, the chapter outlines some emerging lessons with potential for win-wins for ecosystems and wellbeing, including: the need to design interventions with due considerations for local context and trade-offs; the importance of rewarding broader environmental stewardship; explicitly including pro-poor and equity-based objectives as part of project design; and recognising and addressing power dynamics and the roles of both informal and formal institutions that determine access to and benefits from ecosystem services as well as influence behaviours that affect ecosystem services.