Access and Benefits in Payments for Environmental Services, Forest Conservation and Climate Change: Lessons from A Global Review

"This paper presents findings from a recent global study that assessed the impacts of Payments for Environmental Service (PES) schemes on livelihoods, and implications for the design of incentive mechanisms for Reducing Emissions from Deforestation and forest Degradation (REDD). It focuses particularly on two key areas that are important to the local impacts of PES and REDD schemes: (i) whether tenure and wealth filter access to schemes by local resource users and managers and (ii) how the design of contracts and the configuration of payments and other benefits impact local livelihoods and the sustainability of schemes. In terms of access, the PES schemes reviewed occurred on land falling under diverse tenure arrangements, and full ownership rights were not a prerequisite for PES agreements, but the criteria for selecting the location and participantsfor schemes were important access determinants. The schemes did provide some benefitsto participants, for instance a small amount of additional income to participating households, and investments in community infrastructure and services where payments were made to community bodies. Payments were often well below the opportunity costs faced by participants over the life of the scheme, however, which could diminish positive impacts on local livelihoods and ultimately undermine the sustainability of such schemes. Passing on transaction and monitoring costs to participants also reduced the flow of benefits to local actors, and payment schedules often did not cover the full duration of thePES contract, which diminished the likely sustainability and conditionality of the schemes. Such factors will have to be clearly addressed in the design of REDD schemes."