Even When Payments for Ecosystem Services (PES) Work, Are Those Gains Likely To Be Wiped Out When PES End?

Description

Payment for Ecosystem Services (PES) programs compensate individuals and communities for actions they take to sustainably manage or preserve land in ways that benefit those who pay. PES are a potentially powerful tool to address deforestation, as well as other unsustainable land-use outcomes. PES have been implemented worldwide to create economic incentives for conservation. A possible concern about PES is that programs that provide financial incentives to landowners only temporarily—but then remove those incentives—might ultimately generate a decrease in conservation efforts among past participants due to “crowding out”: being spurred to conserve via financial motivations might “crowd out” more intrinsic motivations to conserve land for personal or local. Yet two recent studies in rural Colombia found no evidence of such crowding out among PES program participants and even found indications of “crowding in.”

Methods and Results

In the first study, researchers conducted lab-in-the-field experiments (using some controlled elements of traditional lab experiments but in a context relevant for related actual policies) with rural farmers in Colombia who were active or qualified potential participants in a PES program. Researchers asked participants to allocate hypothetical units of land either to planting crops or to conserving forest, over a series of rounds, with participants receiving varying amounts of money for each action in each round. By adding—and then removing—a temporary payment for conservation in the middle rounds, and for only some of the participants, researchers were able to compare its impacts on the motivation to conserve. While the conservation efforts of the control group (who received no payments at any time for conservation) fell over time, the conservation efforts of those who continued to receive payments and those whose payments ended in the middle rounds were both slightly elevated. Bottomline: the researchers found no evidence of post-PES ‘crowding out’ and found evidence suggestive of short-term ‘crowding in,’ where exposure to an external incentive leads to an increase in personal investment.

In the second study, researchers assessed a program that paid landowners to preserve forests and fence water sources. In the latter phases of the program, many landowners no longer met the changing criteria for inclusion, and thus, they stopped receiving payments. Researchers surveyed many individuals who were currently in or had previously participated in the PES program and many landowners in the same region who were not involved in the program. Researchers compensated participants for completing a survey and then offered the option to donate any of that compensation to one of three national environmental NGOs. They found that those who had been in the program during Phase 1 but were no longer receiving payments donated the same amount as those who had never received payments and, in many instances, donated more. This finding suggests that this PES program had not decreased participants’ internal motivation for conservation. The survey results also indicated that those who were terminated from the program did not have negative feelings about it and were not more likely to remove trees from their property than those in the program or those who had never participated.

Results from both studies provide evidence that there is no necessary reduction in longer-term pro-environmental behaviors after a temporary incentive has been introduced and then removed. Designers of future PES programs should take into consideration this kind of evidence that even temporary public programs can lead to an increase in private behavior supporting conservation.

Team

Members

"Temporary PES do not crowd out and may crowd in forest conservation in Colombia"

• Lina Moros (University of Los Andes), María Alejandra Vélez (Faculty of Economics, University of Los Andes), Daniela Quintero (Universidad de los Andes), Danny Tobin (Duke University), Alexander Pfaff (Duke University)

"No crowding out among those terminated from an ongoing PES program in Colombia"

• Esther Blanco (University of Innsbruck; Indiana University), Lina Moros (University of Los Andes), Alexander Pfaff (Duke University), Ivo Steimanis (University of Marburg), María Alejandra Vélez (University of Los Andes), Björn Vollan (University of Marburg)

Sponsors

"Temporary PES do not crowd out and may crowd in forest conservation in Colombia"

• Swedish International Development Cooperation Agency (Sida)

"No crowding out among those terminated from an ongoing PES program in Colombia"

• Austrian Science Fund

Related Content

Related Links

• "Temporary PES do not crowd out and may crowd in forest conservation in Colombia," published in Ecological Economics Volume 204, Part A, February 2023
• "No crowding out among those terminated from an ongoing PES program in Colombia," published in Journal of Environmental Economics and Management Volume 120, July 2023