Paying for Biodiversity: Enhancing the Cost-Effectiveness of Payments for Ecosystem Services

Drawing on the literature concerning effective PES and on more than 30 case studies from both developed and developing countries, this book aims to identify good practice in the design and implementation of PES programmes so as to enhance their environmental and cost effectiveness.

It addresses the following questions:
Why are PES useful and how do they work?
How can they be made most effective environmentally and how can their cost-effectiveness be maximised?
What are the different potential sources of finance for PES programmes, and how can they be secured?
What are the lessons learned from existing PES programmes and insights for future programmes, including international PES?


Biodiversity and ecosystem services provide tangible benefits for society, such as food provisioning, water purification, genetic resources or climate regulation. These services provide critical life support functions and contribute to human health, well being and economic growth. Yet biodiversity is declining worldwide and, in some areas, this loss is accelerating. The need for policies that promote the conservation and sustainable use of biodiversity and ecosystem services is more important than ever. Payments for Ecosystem Services (PES) is a direct and flexible incentive-based mechanism under which the user or beneficiary of an ecosystem service makes a direct payment to an individual or community whose land use decisions have an impact on the ecosystem service provision. Interest in PES has been increasing rapidly over the past decade: PES are proliferating worldwide and there are already more than 300 programmes in place today at national, regional and local levels.

Table of contents
Acronyms and abbreviations
Executive summary
Introduction
Part I: Designing and implementing effective payments for ecosystem services programmes
Chapter 1: The economics of payments for ecosystem services
1.1 PES: an incentive-based mechanism 38
1.2 Spatial variability in the costs and benefits of biodiversity and ecosystem service provision
References
Chapter 2: Environmentally effective payments for ecosystem services
2.1 PES pre-requisites
2.2 General design elements for environmentally effective PES
References
Chapter 3: Cost-effective targeting of payments for ecosystem services
3.1 Targeting ecosystem services with high benefits
3.2 Targeting ecosystems services at risk of loss or degradation
3.3 Targeting providers with low opportunity costs
References
Chapter 4: Mobilising finance for payments for ecosystem services
4.1 Identifying ecosystem service financing needs and sources
4.2 Experience with private sector PES financing
References
Chapter 5: Insights for international payments for ecosystem services
5.1 Harnessing synergies between global carbon finance and biodiversity
5.2 International payments for biodiversity
References
Part II: Payments for ecosystem services programmes case studies
Chapter 6: United States: The USDA Conservation Reserve Programme
6.1 Introduction 1
6.2 The CRP general sign-up
6.3 The CRP environmental and cost effectiveness
6.4 Conclusions
References
Chapter 7: Australia: The Tasmanian Forest Conservation Fund
7.1 Introduction
7.2 Key design elements of the FCF
7.3 Effectiveness and efficiency of the FCF
7.4 Application of lessons in the Environmental Stewardship Programme
7.5 Conclusions
References
Chapter 8: Indonesia: A pilot PES auction in the Sumberjaya watershed.
8.1 Introduction
8.2 Designing the PES inverse auction
8.3 Auction outcomes and environmental impacts
8.4 Conclusions
References
Chapter 9: Conclusions
References
Annex A: Case study overview