Payments for Environmental Services in Latin America as a Tool for Restoration and Rural Development

Payments for Environmental Services (PES) can encourage projects that enhance restoration, production, and rural development. When projects promote differentiated systems by paying farmers for the provision of services, the application of PES requires evaluation of the environmental services provided by each system. We present evaluations of carbon stocks and biodiversity in pure and mixed native tree plantations in Costa Rica. To illustrate how monetary values can be assigned, we discuss a project that awarded PES to silvopastoral systems in Costa Rica, Nicaragua, and Colombia based on carbon stocks and biodiversity. PES can promote positive environmental attitudes in farmers. Currently this project is being scaled up in Colombia based on their positive experiences with PES as a tool to promote adoption. Compared to PES systems that include only one environmental service, systems that incorporate bundling or layering of multiple services can make sustainable land uses more attractive to farmers and reduce perverse incentives.