Trends and Future Potential of Payment for Ecosystem Services to Alleviate Rural Poverty in Developing Countries

Payment for ecosystem services (PES) is a market-based approach to environmental management that compensates land stewards for ecosystem conservation and restoration. Because low-income households and communities control much of the ecologically sensitive land in developing countries, they potentially stand to gain from PES, as environmentally responsible stewardship is assigned a value by various actors in society. To date, however, instances of PES benefiting the poor have been limited mainly to specific localities, small-scale projects, and a handful of broader government programs. We analyze the size, characteristics, and trends of PES to evaluate its future potential to benefit low-income land stewards in developing countries. We estimate that by the year 2030, markets for biodiversity conservation could benefit 10-15 million low-income households in developing countries, carbon markets could benefit 25-50 million, markets for watershed protection could benefit 80-100 million, and markets for landscape beauty and recreation could benefit 5-8 million. If payments and markets reach these potentials, they could provide a non-negligible contribution to poverty alleviation at the global level