Payments for Environmental Services

Despite their value, environmental services are often lost as land users typically receive no compensation for the services their land generates for others and therefore have no economic reason to take these services into account in making decisions about land use. The payment for environmental services (PES) approach is an example of efforts to develop systems in which land users are paid for the environmental services they generate. The central principles of PES are that those who provide environmental services should be compensated for doing so and that those who receive the services should pay for their provision. Aspects concerning PES include: identifying environmental services; financing compensation for environmental services; developing effective compensation systems; and establishing the institutional framework.