The usually excellent Mongabay ran the scare headline, “Could industrial interests ruin payments for environmental services?” on a piece in Tropical Conservation Science.  Thankfully the authors of the paper being reported on, “Upscaling Payments for Environmental Services (PES): Critical issues” are a little less alarmist.  Nonetheless, I think that that their concern about large companies getting involved in ecosystem service markets is overwrought.

PES have traditionally been conceived and applied in contexts where the providers of the service are populations (as opposed to industrial companies) – fishermen, farmers, forest dwellers….the compensation paid to the commercial sector benefiting from rights granted by society (government or local authorities) is at best questionable.

This is a narrow and somewhat naive perspective. The largest PES markets are government mandated and mediated programs in the developed world, such as the  U.S.’s Conservation Reserve Program.  The recipients of PES in these cases are mostly large-scale landowners with industrial-size operations, and more recently wetland and habitat bankers.  These actors are essential to getting PES to a scale where it can make a real difference.

The authors do make some good points as to issues that need to get worked out, though, particularly with large-scale international carbon trading through REDD programs.

  • Concessions on public lands - Companies are extracting PES out of public lands on which they have been granted logging rights or other leases.  Countries need to clarify what rights they retain to land they lease.  It would be best international bodies that set standards for carbon trading, set limits on the types of concessions that companies can use to generate income from PES. 
  • Polluter pays - It has been a long standing pillar of environmental policies that the polluter should pay the cost of their environmental degradation.  PES somewhat flips this idea on its head when landowners are paid to not damage the environment.  In purely economic terms, there should be no difference - a landowner is loosing money by foresaking this income.   The real problem is one of access - the programs will be more efficient and equitable if they are scaled up and widely accessible.
  • “Use Restricting” vs. “Asset Building” PES - The authors draw a distinction between “use restricting” payments that merely prevent environmental degradation and “asset building” programs that explicitly use PES to drive sustainable development.  It’s an interesting contrast, but two thoughts come to mind.  First, sustainable development aid needs broader and better funding sources than PES, which are probably too restrictive for real holistic development programs.  Second, this dichotomy ignores a broad spectrum of in-between possibilities that would be ideal for private sector involvement, particularly large scale restoration programs.

Romain Pirard, Raphaël Billé, & Thomas Sembrés (2010). Upscaling Payments for Environmental Services (PES): Critical issues Tropical Conservation Science, 3 (3), 249-261