This primer is designed to provide you with a solid understanding of what Payments
for Ecosystem Service (PES) are and how PES deals work. It is intended for an
audience interested in exploring the potential of PES — either as prospective PES
sellers themselves or as staff of organizations that work directly with communities or
landowners who may be interested in PES. The primer should be read before you set
out to design a PES deal, as it provides guidance on conditions under which PES is
most relevant and likely to succeed. It should also be read sequentially, as concepts
defined in the early pages are built upon later.
In the first section, Ecosystem Services & Emerging Markets and Payments,
you will find a detailed review of basic PES concepts, including:

• What is an ‘ecosystem service’?
• What are the basic types of payments for ecosystem services?

In the second section, Pro-poor Payments for Ecosystem Services:
Opportunities, Risks, and Ideal Conditions, you will learn how PES deals can
offer the rural poor an opportunity to augment their income as stewards of the land by
implementing practices to restore and maintain ecosystem services. You will also learn
the pitfalls of such schemes — the danger of trying to implement PES where it is not
appropriate, for example, or the potential of liability concentrated on those who can least
afford it. You will also learn how to evaluate outside advisors, and when to consult them.

The third section, A Step-by-Step Approach to Developing Payment for
Ecosystem Service Deals, is the core of the primer. Here, you will learn the four key
steps to developing PES deals:
• Identifying Ecosystem Service Prospects and Potential Buyers
• Assessing Institutional and Technical Capacity
• Structuring Agreements
• Implementing PES Agreements


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