Compensation and rewards for environmental services: major findings and conclusions of the pan-tropical scoping study on ecosystem services

This is the first of a series of nine papers exploring the state of the science and practice of compensation and rewards for environmental services in the developing world. This study has been undertaken to address key questions about the impact and future prospects of compensation and rewards for ecosystem services, and the potential role of research and policy engagement in helping to make these instruments more beneficial to the poor in the developing world. The papers resulting from this study have been prepared by an international group of authors as part of a pan-tropical scoping study for the Rural Poverty and Environment Programme of the International Development Research Centre of Canada. All of the papers focus on the frontiers between the ecosystems that underlie rural livelihoods, the environmental services that those ecosystems generate, and the human well-being of rural populations. This introductory paper begins with a review of the recent historical development of compensation and reward mechanisms within a broader context of changing approaches to conservation and environmental policy. Conservation approaches have moved from a sole focus on protected areas, to integrated conservation and development projects, to landscape management approaches, and now, consideration of conservation contracts. At roughly the same time, there has been a general relaxation of government enforcement of environmental regulations towards more multi-stakeholder forms of governance in which non-governmental and international organizations play roles and a variety of market-based and negotiation approaches have come to the fore. That dynamic context is fostering greater interest in mechanisms for compensation and reward for environmental services in the developing regions of the world. Later sections of the paper clarify key concepts and present a conceptual framework for characterizing different types of mechanisms and the internal and external factors affecting those mechanisms. The penultimate section summarizes experience and perceptions of compensation and reward for environmental services. The concluding section postulates the alternative motivations that are shaping compensation and reward mechanisms in the developing world.