Hostname: page-component-6b989bf9dc-llglr Total loading time: 0 Render date: 2024-04-14T20:18:46.736Z Has data issue: false hasContentIssue false

Meta-analysis of institutional-economic factors explaining the environmental performance of payments for watershed services

Published online by Cambridge University Press:  03 November 2011

Department of Environmental Economics, Institute for Environmental Studies, VU University Amsterdam, De Boelelaan 1087, 1081 HV, Amsterdam, the Netherlands
Department of Environmental Economics, Institute for Environmental Studies, VU University Amsterdam, De Boelelaan 1087, 1081 HV, Amsterdam, the Netherlands
Department of Spatial Analysis and Decision Support, Institute for Environmental Studies, VU University Amsterdam, De Boelelaan 1087, 1081 HV, Amsterdam, the Netherlands
*Correspondence: Dr Roy Brouwer Tel: +31 20 598 5608 Fax: +31 20 598 9553 e-mail:


Payments for ecosystem services (PES) are a relatively new economic policy instrument, and the factors that drive and explain their environmental performance are poorly understood. Here a meta-analysis of causal relationships between the institutional design and environmental performance of 47 payments for watershed services (PWS) schemes worldwide showed a significant effect on environmental achievement of the terms and conditions of scheme participation, including the selection of service providers, community participation, the existence and monitoring of quantifiable objectives, and the number of intermediaries between service providers and buyers. Direct payments by downstream hydropower companies to upstream land owners for reduced sediment loads were identified as a successful PWS example. No other significant explanatory factors, such as specific type of watershed service, age or scale of implementation of the PWS scheme were detected. The results are highly dependent on the reliability of the input variables, in particular the measurement of the environmental performance variable. Despite efforts to find quantitative information on the environmental performance of existing PWS schemes, such empirical evidence is lacking in many of the schemes studied. International monitoring guidelines are needed to facilitate comparisons, identify success factors and support the future design of cost-effective PWS schemes.

THEMATIC SECTION: Payments for Ecosystem Services in Conservation: Performance and Prospects
Copyright © Foundation for Environmental Conservation 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)


Anderson, E.P., Pringle, C.M. & Rojas, M. (2006) Transforming tropical rivers: an environmental perspective on hydropower development in Costa Rica. Aquatic Conservation: Marine and Freshwater Ecosystems 16: 679693.CrossRefGoogle Scholar
Arifin, B., Swallow, B.M., Suyanto, S. & Coe, R.D. (2009) A conjoint analysis of farmer preferences for community forestry contracts in the Sumber Jaya Watershed, Indonesia. Ecological Economics 68: 20402050.CrossRefGoogle Scholar
Arriagada, R.A., Ferraro, P.J., Sills, E.O., Pattanayak, S.K. & Cordero, S. (2010) Do payments for environmental services reduce deforestation? A farm level evaluation from Costa Rica. Unpublished report. [www document]. URL Scholar
Asquith, N.M., Vargas, M.T. & Wunder, S. (2008) Selling two environmental services: In-kind payments for bird habitat and watershed protection in Los Negros, Bolivia. Ecological Economics 65: 675684.CrossRefGoogle Scholar
Bennett, M.T. (2008) China's sloping land conversion program: institutional innovation or business as usual? Ecological Economics 65: 699711.CrossRefGoogle Scholar
Bruijnzeel, L.A., Mulligan, M. & Scatena, F.N. (2011) Hydrometeorology of tropical montane cloud forests: emerging patterns. Hydrological Processes 25: 465498.CrossRefGoogle Scholar
Bruijnzeel, L.A., ed. (2006) Hydrological impacts of converting tropical montane cloud forest to pasture, with initial reference to northern Costa Rica. Final Technical Report for Project R7991, DFID Forestry Research Programme. VU University Amsterdam, Amsterdam, The Netherlands.Google Scholar
Bulte, E.H., Lipper, L., Stringer, R. & Zilberman, D. (2008) Payments for ecosystem services and poverty reduction: concepts, issues and empirical perspective. Environment and Development Economics 13: 245254.CrossRefGoogle Scholar
Célleri, R. & Feyen, J. (2009) The hydrology of tropical Andean ecosystems: importance, knowledge status, and perspectives. Mountain Research and Development 29 (4): 350355.CrossRefGoogle Scholar
Crespo, P., Célleri, R., Buytaert, W., Feyen, J., Iñiguez, V., Borja, P. & de Bievre, B. (2009) Land use change impacts on the hydrology of wet Andean páramo ecosystems. In: Status and Perspectives of Hydrology in Small Basins, ed. Herrmann, A. & Schumann, S., IAHS Publication 336. Hahnenklee Goslar, Germany: International Association of Hydrological Sciences (IAHS).Google Scholar
Daniels, A.E., Bagstad, K., Esposito, V., Moulaert, A. & Rodriguez, C.M. (2010) Understanding the impacts of Costa Rica's PES: are we asking the right questions? Ecological Economics 69: 21162126.CrossRefGoogle Scholar
Duncan, E. (2006) Payments for environmental services. An equitable approach for reducing poverty and conserving nature. Report, World Wide Fund For Nature. [www document]. URL Scholar
Engel, S., Pagiola, S. & Wunder, S. (2008) Designing payments for environmental services in theory and practice: an overview of the issues. Ecological Economics 65 (4): 663674.CrossRefGoogle Scholar
Farley, J. & Costanza, R. (2010) Payments for ecosystem services: from local to global. Ecological Economics 69 (11): 20602068.CrossRefGoogle Scholar
Glass, G.V, McGaw, B. & Smith, M.L. (1981) Meta-Analysis in Social Research. Beverly Hills, CA, USA: Sage Publications.Google Scholar
Greiber, T. (2009) Payments for Ecosystem Services. Legal and Institutional Frameworks. Gland, Switzerland: IUCN.Google Scholar
Huang, M., Upadhyaya, S.K., Jindal, R. & Kerr, J. (2009) Paying for watershed services in Asia: a review of current initiatives. Journal of Sustainable Forestry 28: 551575.CrossRefGoogle Scholar
Kemkes, R.J., Farley, J. & Koliba, C.J. (2010) Determining when payments are an effective policy approach to ecosystem service provision. Ecological Economics 69: 20692074.CrossRefGoogle Scholar
Kerr, J. & Jindal, R. (2007) USAID PES Brief 4: Impact evaluation of PES programs. In: Lessons and Best Practices for Pro-poor Payment for Ecosystem Services. USAID PES Source Book, ed. USAID, pp. 5863. Blacksburg, VA, USA: SANREM CRSP [www document]. URL Scholar
Leimona, B., Boer, R., Arifin, B., Murdiyarso, D. & Noordjwijk, M. (2006) Singkarak: combining environmental service markets for carbon and watershed functions? In: Community Forest Management as a Carbon Mitigation Option. Case studies, ed. Murdiyarso, D. & Skutsch, M., pp. 6073. Bogor, Indonesia: Center for International Forestry Research (CIFOR).Google Scholar
Leshan, J., Xiaoyun, L., Zuoting, , Bangyou, Y. & Haiyin, H. (2005) Development contract with terms of watershed conservation: a win-win opportunity for development and environment in the Meijiang Watershed, Ningdu County, Jiangxi Province, China. Case Study Report, IIED Payment for Watershed Services-China diagnostic study, IIED, Beijng, China.Google Scholar
Le Tellier, V., Carrasco, A. & Asquith, N. (2009) Attempts to determine the effects of forest cover on stream flow by direct hydrological measurements in Los Negros, Bolivia. Forest Ecology and Management 258: 18811888.CrossRefGoogle Scholar
Mayrand, K. & Paquin, M. (2004) Payments for environmental services: a survey and assessment of current schemes. Commission for Environmental Cooperation of North America, Unisfera International Center, Montreal, Canada [www document]. URL Scholar
Morse, W.C., Schedlbauer, J.L., Sesnie, S.E., Finegan, B., Harvey, C.A., Hollenhorst, S.J., Kavanagh, K.L., Stoian, D. & Wulfhorst, J.D. (2009) Consequences of environmental service payments for forest retention and recruitment in a Costa Rican biological corridor. Ecology and Society 14 (1): 23.CrossRefGoogle Scholar
Muñoz-Piña, C., Guevara, A., Torres, J.M. & Braña, J. (2008) Paying for the hydrological services of Mexico's forests: analysis, negotiations and results. Ecological Economics 65:725736.CrossRefGoogle Scholar
Muñoz-Villers, L.E., Holwerda, F., Gómez-Cárdenas, M., Equihua, M., Asbjornsen, H., Bruijnzeel, L.A., Marín-Castro, B.E. & Tobón, C. (2011) Water balances of old-growth and regenerating montane cloud forests in central Veracruz, Mexico. Journal of Hydrology (in press).CrossRefGoogle Scholar
Muradian, R., Corbera, E., Pascual, U., Kosoy, N. & May, P.H. (2010) Reconciling theory and practice: An alternative conceptual framework for understanding payments for environmental services. Ecological Economics 69: 12021208.CrossRefGoogle Scholar
Nelson, J.P. & Kennedy, P.E. (2009) The use (and abuse) of meta-analysis in environmental and resource economics: an assessment. Environmental and Resource Economics 42: 345377.CrossRefGoogle Scholar
Pagiola, S. & Platais, G. (2002) Payments for environmental services. Environment Strategy Notes no. 3. The World Bank Environmental Department, Washington, DC, USA [www document]. Scholar
Pfaff, A., Robalino, J.A. & Sanchez-Azofeifa, G.A. (2008) Payments for environmental services: empirical analysis for Costa Rica. Working Paper series SAN08-5, Terry Sanford Institute of Public Policy, Duke University, Durham, NC, USA [www document]. URL Scholar
Porras, I., Grieg-Gran, M. & Neves, N. (2008) All that glitters. A review of payments for watershed services in developing countries. Natural Resource Issues No. 11. International Institute for Environment and Development. London, UK.Google Scholar
Rebelo, C. (2009) Financing for Forest Conservation: Payments for Ecosystem Services in the Tropics Yale ISTF Conference, March 2007. Journal of Sustainable Forestry 28: 279284.CrossRefGoogle Scholar
Rojahn, A. & Engel, S. (2005) Direct payment for biodiversity conservation, watershed protection and carbon sequestration: contract theory and empirical evidence. Working paper, Institute for Environmental Decision, Chair of Environmental Policy and Economics. ETH, Zurich, Switzerland.Google Scholar
Salzman, J. (2005. The promise and perils of payments for ecosystem services. International Journal of Innovation and Sustainable Development 1 (1/2): 520.CrossRefGoogle Scholar
Smith, M., de Groot, D., Perrot-Maîte, D. & Bergkamp, G. (2006) Establishing payments for watershed services. IUCN, Gland, Switzerland [www document]. URL Scholar
Southgate, D. & Wunder, S. (2009) Paying for watershed services in Latin America: a review of current initiatives. Journal of Sustainable Forestry 28: 497524.CrossRefGoogle Scholar
Stanley, T.D. (2001) Wheat from chaff: meta-analysis as quantitative literature review. Journal of Economic Perspectives 15: 131150.CrossRefGoogle Scholar
Tognetti, S.S., Aylward, B. & Bruinzeel, L.A. (2010) Assessment needs to support the development of arrangements for payments for ecosystem services from tropical montane cloud forests. In: Tropical Montane Cloud Forests: Science for Conservation and Management, ed. Bruijnzeel, L.A., Scatena, F.N., Hamilton, L.S., pp. 671685. Cambridge, UK: Cambridge University Press.Google Scholar
Turpie, J.K., Marais, C. & Blignaut, J.N. (2008) The working for water programme: evolution of a payments for ecosystem services mechanism that addresses both poverty and ecosystem service delivery in South Africa. Ecological Economics 65: 788798.CrossRefGoogle Scholar
Van den Bergh, J.C.J.M., Button, K.J., Nijkamp, P. & Pepping, G.C. (1997) Meta-analysis in Environmental Economics. Dordrecht, The Netherlands: Kluwer.CrossRefGoogle Scholar
Vatn, A. (2010) An institutional analysis of payments for environmental services. Ecological Economics 69: 12451252.CrossRefGoogle Scholar
Wolf, F.M. (1986) Meta-analysis. Beverly Hills, CA, USA: Sage Publications.CrossRefGoogle Scholar
Wunder, S. (2005) Payments for environmental services: some nuts and bolts. Occasional Paper No. 42. Center for International Forestry Research (CIFOR), Bogor, Indonesia.Google Scholar
Wunder, S. & Alban, M. (2008) Decentralized payments for environmental services: the case of Pimampiro and PROFAFOR in Ecuador. Ecological Economics 65: 685698.CrossRefGoogle Scholar
Wunder, S., Engel, S. & Pagiola, S. (2008) Taking stock: a comparative analysis of payments for environmental services programs in developed and developing countries. Ecological Economics 65: 843852.CrossRefGoogle Scholar
Wunscher, T., Engel, S. & Wunder, S. (2008) Spatial targeting of payments for environmental services: a tool for boosting conservation benefit. Ecological Economics 65: 822833.CrossRefGoogle Scholar