A Policy Maker's Guide to Designing Payments for Ecosystem Services

60 Pages Posted: 2 Nov 2009

See all articles by James E. Salzman

James E. Salzman

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management; University of California, Los Angeles (UCLA) - School of Law

Date Written: November 2, 2009

Abstract

Over the past five years, there has been increasing interest around the globe in payment schemes for the provision of ecosystem services, such as water purification, carbon sequestration, flood control, etc. Written for an Asian Development Bank project in China, this report provides a user-friendly guide to designing payments for the provision of ecosystem services. Part I explains the different types of ecosystem services, different ways of assessing their value, and why they are traditionally under-protected by law and policy. This is followed by an analysis of when payments for services are a preferable approach to other policy instruments. Part II explains the design issues underlying payments for services. These include identification of the service as well as potential buyers and sellers, the level of service needed, payment timing, payment type, and risk allocation. Part II contains a detailed analysis of the different types of payment mechanisms, ranging from general subsidy and certification to mitigation and offset payments. Part III explores the challenges to designing a payment scheme. These include the ability to monitor service provision, secure property rights, perverse incentives, supporting institutions, and poverty alleviation.

Suggested Citation

Salzman, James E., A Policy Maker's Guide to Designing Payments for Ecosystem Services (November 2, 2009). Available at SSRN: https://ssrn.com/abstract=1498629 or http://dx.doi.org/10.2139/ssrn.1498629

James E. Salzman (Contact Author)

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management ( email )

4670 Physical Sciences North
Santa Barbara, CA 93106-5131
United States

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

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