Internalizing Externalities through Payments for Environmental Services

Payments for Environmental Services in Costa Rica

Costa Rica pioneered the use of the payments for environmental services (PES) approach in developing countries by establishing a formal, country-wide program of payments, the PSA program. The PSA program has worked hard to develop mechanisms to charge the users of environmental services for the services they receive. It has made substantial progress in charging water users, and more limited pro...

CAMPFIRE and payments for environmental services

Advocates of payments for environmental services (PES) distinguish such schemes from the more common integrated conservation and development projects on the grounds that the payments for the environmental services are direct, more cost-effective, less complex institutionally, and therefore more likely to produce the desired results. Both kinds of schemes aim to achieve similar conservation and ...

Evaluating Payments for Environmental Services: Methodological Challenges

Over the last fifteen years, Payments for Environmental Services (PES) schemes have become very popular environmental policy instruments, but the academic literature has begun to question their additionality. The literature attempts to estimate the causal effect of these programs by applying impact evaluation (IE) techniques. However, PES programs are complex instruments and IE methods cannot b...

Internalizing the externalities of meaning

Payments for Environmental Services: Empirical analysis for Costa Rica

Evaluating its impact using the deforestation observed in matched untreated areas, we find that Costa Rica’s ‘PSA’ program of payments for environmental services had little effect on 1997-2000 forest clearing. Reasons include: a low national rate of deforestation; no targeting of those locations more likely to change land usage; and a goal of transferring surplus to landowners. This pioneering ...