An important part of conservation practice is the empirical evaluation of program and policy impacts. Understanding why conservation programs succeed or fail is essential for designing cost-effective initiatives and for improving the livelihoods of natural resource users. The evidence we seek can be generated with modern impact evaluation designs. Such designs measure causal effects of specific interventions by comparing outcomes with the interventions to outcomes in credible counterfactual scenarios. Good designs also identify the conditions under which the causal effect arises. Despite a critical need for empirical evidence, conservation science has been slow to adopt these impact evaluation designs. We identify reasons for the slow rate of adoption and provide suggestions for mainstreaming impact evaluation in nature conservation.

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Assessing global tendencies and impacts of conditional payments for environmental services (PES) programs is challenging because of their heterogeneity, and scarcity of comparative studies. This meta-study systematizes 55 PES schemes worldwide in a quantitative database. Using categorical principal component analysis to highlight clustering patterns, we reconfirm frequently hypothesized differences between public and private PES schemes, but also identify diverging patterns between commercial and non-commercial private PES vis-à-vis their service focus, area size, and market orientation. When do these PES schemes likely achieve significant environmental additionality? Using binary logistical regression, we find additionality to be positively influenced by three theoretically recommended PES ‘best design’ features: spatial targeting, payment differentiation, and strong conditionality, alongside some contextual controls (activity paid for and implementation time elapsed). Our results thus stress the preeminence of customized design over operational characteristics when assessing what determines the outcomes of PES implementation.

We assess the additional forest cover protected by 13 rural communities located in the southern state of Chiapas, Mexico, as a result of the economic incentives received through the country's national program of payments for biodiversity conservation. We use spatially explicit data at the intra-community level to define a credible counterfactual of conservation outcomes. We use covariate-matching specifications associated with spatially explicit variables and difference-in-difference estimators to determine the treatment effect. We estimate that the additional conservation represents between 12 and 14.7 percent of forest area enrolled in the program in comparison to control areas. Despite this high degree of additionality, we also observe lack of compliance in some plots participating in the PES program. This lack of compliance casts doubt on the ability of payments alone to guarantee long-term additionality in context of high deforestation rates, even with an augmented program budget or extension of participation to communities not yet enrolled.

Research on Payments for Environmental Services has only recently started to pay attention to motivation "crowding", i.e. the effect that such rewards might have on either strengthening (crowding-in) or weakening (crowding-out) participants' intrinsic motivations to protect and sustainably manage natural ecosystems. In this Introduction to the special issue Crowding-out or crowding-in? Behavioral and motivational responses to economic incentives for conservation, we propose a conceptual framework that maps out how PES implementation, or incentive-based conservation more broadly, might lead to motivation and behavioural change, drawing on theoretical insights and empirical evidence from behavioural economics and social psychology. We also explain how PES design and implementation factors, such as payment type, communication and verbal rewards, inclusive and participatory decision-making, and monitoring and sanctioning procedures, might harm or enhance intrinsic motivations. We suggest that motivation crowding depends on how these policy features are perceived by and affect an individual's need for satisfaction, modulated in turn by the stimulation or inhibition of competence, autonomy, social and environmental relatedness. We highlight the importance of measuring these variables and their motivation and behavioural outcomes in future PES research, in order to relate psychological processes with other contextual determinants of PES social-ecological performance.

We estimate the early effects of the pilot project to Reduce Emissions from Deforestation and forest Degradation (REDD+) in the Brazilian Amazon. This project offers a mix of interventions, including conditional payments, to reduce deforestation by smallholders who depend on swidden agriculture and extensive cattle ranching. We collected original data from 181 individual farmers. We use difference‐in‐difference (DID) and DID‐matching approaches and find evidence that supports our identification strategy. We estimate that an average of 4 ha of forest were saved on each participating farm in 2014, and that this conservation came at the expense of pastures rather than croplands. This amounts to a decrease in the deforestation rate of about 50%. We find no evidence of within‐community spillovers.

We develop a theory of change for payments for environmental services (PES) to review their imminent strengths and weaknesses in light of a growing body of impact evaluation studies. We show that PES are probably at least as environmentally additional as other conservation tools, based on the limited evidence. The original vision of PES as being direct, flexible, and potentially effective remains valid, but PES design and implementation have to be upgraded in their economic functioning to better realize this potential. Adverse self-selection, inadequate administrative targeting, and ill-enforced conditionality constitute three key obstacles that may considerably hamper PES success. Policies such as spatial targeting to service density, threat and cost levels, and payment differentiation can alleviate the design challenges. PES site selection needs to further move into high-threat areas. Making adequate PES design choices also requires the political will to boost environmental effects. Expected final online publication date for the Annual Review of Resource Economics, Volume 12 is October 5, 2020. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.