Description

Introduction: PES programs can have a significant impact on the poor. This is because potential service providers often constitute poor land users who depend directly on the local resource base for their livelihoods. Payments for securing useful environmental services potentially represent an opportunity to improve the economic well being of the poor who provide services. PES literature often highlights the potential compatibility between environmental conservation and poverty alleviation, so much so that some organizations now consider PES primarily as a tool for reducing poverty.

Skeptics, however, question the effectiveness of a market-based instrument like PES to benefit the poor. A crucial point often overlooked in the debate is conditionality, which makes PES unique among various incentive-based conservation approaches. PES programs are based on the principle that people who benefit from environmental services may have to offer payment to the land users who are in position to provide the services. Of course, buyers will not want to pay for services they obtain without paying, and they will not want to make payments to people who do not provide the service. Payments are thus conditional on the continued supply of and demand for the environmental service in question. For PES to benefit the poor, they must be able to provide the desired service, and demand for it must persist, or else payments may no longer be forthcoming. In fact, PES programs must take care to avoid situations where poverty alleviation and environmental protection objectives compete with each other. If efforts to help the poor in a PES program come at the expense of delivery of the service, the program may fail, in which case of course it cannot help the poor.