|Module : Environmental Economics |

Who can make money with payments for environmental services?

Robin Coinus and Jérémy Garcia

Supagro Montpellier

Abstract

Payments for environmental services (PES) are becoming increasingly popular to protect ecosystems: purchasers of environmental services are willing to pay them from those who can provide or maintain them. PES are often defended as a way to subsidize the poor. But PES can also increase the poverty issue either because payments are too low or because they primarily target business interests. Differentiate PES according to who buys, or to the environmental objectives, allows us to identify several situation with different potential beneficiaries.
Keywords

Payment for environmental services, Positive externalities, Opportunity cost, government financed programs, private financed programs, carbon sequestration, water, pro-poor targeting

Economic instruments and based on market mechanisms are used in the context of pollution prevention and ecosystem conservation for decades. In most cases, they try to prevent negative environmental externalities (pollution or habitat destruction) by means of green taxes, fees or other tools based on the principle of polluter pays. But over the past decade, new approaches focus on creating positive environmental externalities through the adoption of appropriate economic incentives, often in the form of grants or other environmental programs, such as agri-environment schemes. PES is one of those new approaches that promote positive environmental externalities through the transfer of financial resources among the beneficiaries of environmental services (ES) and their providers or managers of environmental resources.

Definition

There is not real definition to PES. It can be describe through like
A voluntary transact where 1. a voluntary transaction where