Assessing the potential for synergy in the implementation of Payment for Environmental Services (PES) programs: an empirical analysis in Costa Rica

Payment for environmental services (PES) is a promising mechanism for conservation. It also has the potential to contribute to social objectives such as poverty reduction. To promote synergy in the implementation of PES, however, a number of conditions on spatial, economic, ecological, and institutional feasibilities are essential. This study discusses factors affecting the synergy prospect of PES and provides a simple framework for assessing the potential for synergy in the implementation of PES, focusing on spatial correlation of thematic areas and funding availability for payments. We apply the framework to an empirical analysis of the “water funding” in Costa Rica, a new conservation financing source generated by water tariff revenue and will be channeled through the existing national PES program of Costa Rica (Pago por Servicios Ambientales, PSA). The analysis can help guide the re-allocation of the regular PSA budget in response to the water funding for synergy among conservation goals (watershed and biodiversity) and social development objective.