Could Payments for Ecosystem Services Create an "Ecosystem Service Curse"?

Abstract

ABSTRACT. Payments for ecosystem services (PES) have received much praise and are increasingly perceived as a promising tool to ensure the protection of global ecosystems as well as being able to help alleviate poverty in areas rich in ecosystem services. Given current trends, the scale of payments is likely to grow, creating new circumstances within which ecosystem services will be managed. In this dynamic context, following a precautionary approach, one should focus on establishing systems to handle the risks involved. Based on an analogy to resources that have long been included in the system of market transactions, we suggest that the rapid development of PES can negatively influence regional and potentially national economies. Resource revenues are highly correlated with economic problems in poor countries that are not able to use those revenues to ensure sound development. Problems similar to those that affect resource-rich countries may emerge in the case of economies rich in ecosystem services once PES increase in spatial and monetary scale. The most prominent examples of such problems include rent seeking, unequal bargaining power of buyers and sellers, volatility of payments, which are all related to the quality of institutions. To ensure the long-term positive impacts of PES, such systems should be carefully designed paying particular attention to distribution of property rights and transparency, decentralization of revenues, and capacity building to ensure further development opportunities.

Global benefits and local costs – The dilemma of tropical forest conservation: A review of the situation in Madagascar

“…Moreover, where compensation is paid, due to a lack of information and education and local power relations, the beneficiaries may not be the affected households (Poudyal et al 2016). While it is possible to pay local households directly for not carrying out certain activities, the impact on the household in terms of livelihood security may be negative if those payments become unavailable sometime in the future (Kronenberg & Hubacek 2013). Similarly, the benefit transfer from the bioprospecting of genetic resources would require elaborate agreements between local representatives and international agents.…”

REDD+ and Institutions

“…From the point of view of the "ecosystem service curse" hypothesis, whereby payments for ecosystem services (including those offered within REDD+) might lead to socio-economic problems in recipient countries [10], indicators such as Rule of Law and Control of Corruption are of particular importance. The poor performance in these two indicators might be related in particular to the problems of rent-seeking and exploitation of unequal bargaining power.…”

“…In the following section we describe the method we used, and then the results obtained. Next, we discuss these results, referring back to Ebeling and Yasué [4], Kronenberg and Hubacek [10], and Sandbrook and colleagues [12] to determine whether what they suggested can be seen in the modern practice of REDD+.…”

“…These and other problems with PES were summarized by Muradian and colleagues [9]. Kronenberg and Hubacek [10] specifically referred to REDD+ as an example of a global PES scheme. They suggested that because of its scale, REDD+ may bring about some of the same significant problems discussed in the context of PES.…”

Ecosystem Services, Governance, and Stakeholder Participation: an Introduction

“…Following a precautionary approach, Kronenberg and Hubacek (2013) investigate ways in which the rapid development of PES can negatively influence regional and national economies. Drawing from the resource curse literature, the authors point out that resource revenues are highly correlated with economic problems in poor countries that are not able to use those revenues to ensure sound development.…”