KeywordsMarket-based policy tools; payments for ecosystem services; enviromental governace; integrated conservation and development projects; ecosystem services. Correspondence AbstractIn this commentary we critically discuss the suitability of payments for ecosystem services and the most important challenges they face. While such instruments can play a role in improving environmental governance, we argue that over-reliance on payments as win-win solutions might lead to ineffective outcomes, similar to earlier experience with integrated conservation and development projects. Our objective is to raise awareness, particularly among policy makers and practitioners, about the limitations of such instruments and to encourage a dialogue about the policy contexts in which they might be appropriate.

Since its emergence in the early seventies, the environmental policy domain has substantially changed in terms of its content, organisation and instrumentation. Hitherto these changes have been studied primarily as strategic responses of the actors involved. This article aims to conceive recent changes in environmental policies in terms of political modernisation on the one hand, and in terms of the renewal of policy arrangements on the other. Political modernisation refers to structural processes of changing interrelations between state, market and civil society, and to new conceptions and practices of governance. Policy arrangements refer to the substance and the organisation of policy domains in terms of policy discourses, coalitions, rules of the game and resources. This analytical framework aims to do justice to policy dynamics caused by both strategic and structural factors. It therefore provides new perspectives on the understanding of recent changes in environmental policy and also proves to be helpful in improving those policies.

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