Study shows that when policymakers take shortcuts, the likelihood for under-performance of Payment for Environmental Services (PES) schemes is greater

Let’s assume you want to conserve a large, widely-forested watershed by compensating people for not cutting down trees. Would it be more effective to choose the most threatened, erosion-prone areas first? Would it be best to offer higher payments for the most strategic spots? Or should you offer the same payment per hectare to everyone, to avoid jealousy and keep transaction costs down?

Einstein once said: “Everything should be made as simple as possible, but not simpler.” This quest for the right level of sophistication also applies to payments for environmental services (PES).

A recent meta-study of 55 PES schemes from around the world sheds some light on what payment strategies work best, under particular circumstances, to bring about optimal environmental impacts.

The study found some surprising patterns, says Sven Wunder, a scientist at the Center for International Forestry Research (CIFOR) and co-author of the report.

“Considering the large diversity of experiences worldwide, we found that PES schemes fell into three neat clusters,” Wunder says. Some are implemented by governments, others are coordinated by non-governmental organizations (NGOs), and still others are private commercial ventures. The three groups all have different characteristics.

“Previous studies focused largely on public versus private models, but we also found a difference between private, commercial, and typical NGO schemes in terms of focus, relationship with markets, and other factors,” Wunder says. “The type of implementer and the characteristics of the PES scheme tend to go hand in hand.”

See http://blog.cifor.org/47551/the-cost-of-oversimplification?fnl=