Payments and conditionality

PES programs are based on the principle that land users who provide useful environmental services should receive payments from people who consume these services. These payments, also referred to as rewards or compensation, as discussed below, can be made for reducing environmental threats (foregoing land use that is detrimental to downstream communities) or for investing in new land-use practices that create positive benefits for downstream communities. PES is distinct among incentive-based conservation approaches because it provides direct inducements to service providers, conditional on continued provision of the service. Directness implies that payments or other economic benefits are directly targeted to provision of the service.