This chapter discusses the use of PES schemes as a suitable market-based instrument to achieve sustainable use and management of ecosystems regarded as important, due to their contribution to human welfare in its many expressions.
Forest ecosystem services (FES) are fundamental for the Earth’s life support systems. This chapter discusses the different services provided by forest ecosystems and the effects that land use and forest management practices have on their provision. It also discusses the role of markets in providing an enabling environment for a sustainable and equitable provision of FES, and describes a standardized approach for designing effective PES (Payment for Environmental Services) that takes into consideration the biophysical, demand (beneficiaries) and supply (providers) components, as well as institutional requirements of a PES scheme. The chapter assesses some potential limitations and challenges in the use of market mechanisms in general, and PES schemes in particular, for sustaining the provision of forest ecosystem services, such as difficulties to demonstrate that services are actually being provided, lack of an effective demand for the services or restrictions from the supply side, as well as other limitations related to institutional capacity and scale. The main challenge is probably in establishing long term, sustainable financing mechanisms that effectively internalize environmental services in the appropriate institutional frameworks. To overcome these challenges, research and management need to take into consideration larger temporal and spatial scales, as well as integrate the different components in the landscape and in the policy and decision-making processes.
Convening lead authors:
Francisco Alpízar, Bastiaan Louman and John Parrotta
Contributing author:
Ina T. Porras
