Workshop on “Payments for Environmental Services (PES) – Methods and design in developing and developed countries”

June 07, 2005.  

When: June 15-18, 2005


Where: Titisee, Germany


Organizers: Center for Development Research (ZEF), University of Bonn

Center for International Forestry Research (CIFOR), Bogor


Sponsored by: Robert Bosch Foundation, CIFOR, IIED, Forest Trends, Katoomba Gruppe


Expected Output: Special issue of Ecological Economics




Local land use decisions often result in environmental damages that impact on people other than those taking the decision. Payments for environmental services (PES) are increasingly discussed as a mechanism to translate external, non-market values of the environment into real financial incentives for local actors. Under PES, local actors are given a periodic payment conditional on the adoption of more sustainable land use practices. The existing discussion on emerging PES systems in developing countries has largely not taken into account the significant experiences with PES type of initiatives in developed countries (e.g., in the form of agri-environmental payments to landowners, conservation easements, etc.). For these countries, a considerable amount of studies on the optimal scheme design have been conducted. We plan to focus on area-based PES – payments that focus on land-unit incentives as the vehicle for buying environmental services. One major objective of the workshop is to test the relevance of these more advanced PES tools throughout the development process. What worked and what did not – and which lessons are applicable to other countries? Our aim is to facilitate a global exchange of experiences between scientists working on PES issues. We envisage a small number of conceptual papers, and a majority of case studies from both developed (US, EU, Australia) and developing countries.




The thematic emphasis of the workshop is on methodological considerations regarding PES scheme design. This includes the following research questions:


- How is a PES scheme defined? What are the characteristics distinguishing it from other incentive-based tools for natural resource management? Can a PES scheme, or components of it, be successfully combined with pre-existing tools (integrated projects, command and control, etc.)?


- What are the most essential preconditions for starting up a PES scheme? Is social capital (“trust”) a sine qua non? Or to what extent can it be substituted for by legislation, intermediaries and tailor-made institutional design?


- To what extent have PES schemes applied in the past been efficient? (We measure efficiency in terms of achieving additionality, permanence and avoiding leakage of the environmental service, at a given cost level.)


- Can the PES scheme’s efficiency be decisively improved by spatial differentiation? Can site selection be rationalized by explicitly considering the spatial variability in opportunity costs, threats of resource degradation, and the level of environmental services provision?


- If a spatial differentiation of payments is either not politically feasible or triggers excessive transaction costs, could PES schemes be designed to permit a self-selection of more efficient sites (e.g., through auction design or by offering a menu of possible contracts?


- How can the participation of small-scale landowners and local communities in PES schemes be supported? At what incremental costs can a “social targeting” be achieved? Under what political-economy circumstances are PES schemes likely to turn into rural welfare subsidies with low environmental efficiency?


The Organisers:


STEFANIE ENGEL is a Senior Researcher at the Center for Development Research (ZEF), University of Bonn, Germany, where she leads the group on Natural Resource Economics. She holds a Ph.D. in agricultural and resource economics from the University of Maryland and has published several internationally peer-reviewed articles, including several publications in the Journal of Environmental Economics and Management and in Environmental and Resource Economics. She is also a member of the Task Force on Environmental Economics within the International Policy Dialogue (IPD) directed by Joseph Stiglitz, University of Columbia.


SVEN WUNDER is a Senior Economist with the Centre for International Forestry Research (CIFOR), headquartered in Bogor, Indonesia. He has published or co-published eight books (incl. Cambridge University Press, Routledge, Macmillan Press) and 14 internationally peer-reviewed articles (incl. Ecological Economics, World Development, The World Bank Research Observer, Conservation Ecology, Environment and Development Economics, and Mountain Research and Development). He has recently acted as a co-editor of a Special Issue on Forests, Livelihoods and Biodiversity (forthcoming 2005 in World Development ).


Stefanie Engel

Prof. Dr. Stefanie Engel