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can be challenging to define the limits of the service being traded. Furthermore, setting up markets for ecosystem serv- ices may create the need for supporting institutions, which in turn may put pressure on the communities and cultures.


Pricing in PES schemes can take various approaches. Price tags may reflect the total economic value (TEV) of ecosystems and their full range of services, including non-monetary val- ues such as aesthetics or spiritual and cultural qualities. On the other hand, prices can just be based on the value of direct monetary benefits which are increased or secured for the ben- eficiary (such as clean drinking water), or decreased for the provider (such as the revenues from logging).


At present many PES schemes are publicly financed. Targeted market design and the development of appropriate institu- tional frameworks are needed to support the establishment and operation of markets for PES. Frameworks might include issues concerning land tenure, property rights, and decision- making mechanisms within local communities. Some form of access and/or usage rights are oſten a prerequisite for entering PES schemes, as only those who own ecosystems are able to sell them. Care needs to be taken to ensure that the design of institutional markets is suited to the local context. Other- wise there is a risk that a PES scheme may exert significant cultural and socio-economic pressures on local communities unaccustomed to working with and through markets for eco- system services.


While the poor may face challenges entering PES schemes for lack of a title to their land or market competitiveness in providing PES, there is a clear link between poverty allevia- tion and ecosystem health. Te poor rely disproportionately on ecosystem services for their livelihood and well-being and have few alternatives if they lose these services. Sustainable use of ecosystems and protection of biodiversity should be seen as key factors in poverty reduction. Te wealth of the poor resides in the health of the ecosystems.


By generating income, PES can be a vehicle for empowering local communities, providing access to education and cultur- al participation. It can also provide an opportunity to escape from a life exclusively devoted to subsistence.


Tis publication seeks to unravel some of the complex issues raised by PES – and to illustrate the benefits PES schemes can bring both to the natural environment and to human well- being.


Definitions – Payment for Ecosystem Services


‘It is a voluntary transaction in which a well- defined environmental service (ES) (or a land use likely to secure that service) is being pur- chased by at least one ES buyer from at least one ES provider if, and only if, the ES pro- vider ensures the supply of the ES (i.e. there is conditionality)’. Source: Wunder, S. (2005) Payments for Environmental Services: Some nuts and bolts, Centre for International Forestry Research Occasional Paper No. 42. Centre for International Forestry Research, Bogor.


‘A PES scheme is a transparent system for the additional provision of environmental services through conditional payments to vol- untary providers’. Source: Tacconi, L. (2011). Redefining Payment for Environ- mental Services. Ecological Economics, Jan 2012, Vol. 73, p29-36.


VITAL GRAPHICS ON PAYMENT FOR ECOSYSTEM SERVICES 7


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