The goal of this course is to understand how payments for environmental services (PES) schemes can be designed, how they are currently operating in practice, and what environmental, social and economic outcomes they are having.

The course will focus on both theoretical aspects of the design of the schemes and empirical analysis of the outcomes of existing schemes.

The issues considered in this course will include:

-    The rationale of PES schemes

-    Arguments pro and against PES schemes

-    The economic theory behind PES schemes

-    Key principles of the design, including pricing, transparency, additionality, and conditionality

-    Land and property rights

-    Efficiency vs cost effectiveness of the schemes

-    The role of PES in poverty alleviation

-    Practical applications of PES: climate change, biodiversity, watershed management, coastal management

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

On completion of the course, students will: 

1. Possess a critical understanding of the theory underpinning payments for environmental services (PES) schemes
2. Have knowledge of the  key design principles of PES schemes
3. Understand the role of PES in environmental management
4. Be able to apply this theoretical understanding to  interventions
5. Be able to verbally communicate the theory and the principles underlying PES schemes

Staff Feedback

Students will be given feedback in the following forms in this course:

• Written comments
• Verbal comments
• Feedback to the whole class, to groups, to individuals, focus groups

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Week 1 This week we introduce Payments for Environmental Services (PES) and we compare them with other conservation tools such as protected areas, integrated conservation and development projects, and intergovernmental fiscal transfers	Ferraro, Paul J., and Agnes Kiss. 2002. “Direct Payments to Conserve Biodiversity.” Science 298: 1718–19. Salzman, James et al. 2018. “The Global Status and Trends of Payments for Ecosystem Services.” Nature Sustainability 1(3): 136–44. Santos Rui, R., Irene Ring, Paula Antunes, and Pedro Clemente. 2012. “Fiscal Transfers for Biodiversity Conservation: The Portuguese Local Finances Law.” Land Use Policy 29(2): 261–73. Sims, Katharine R.E., and Jennifer M. Alix-Garcia. 2017. “Parks versus PES: Evaluating Direct and Incentive-Based Land Conservation in Mexico.” Journal of Environmental Economics and Management 86: 8–28.
2	Week 2 This week we discuss the economic and financial rationale of incentive systems and we consider key theoretical and definitional aspects of PES	Muradian, Roldan et al. 2010. “Reconciling Theory and Practice: An Alternative Conceptual Framework for Understanding Payments for Environmental Services.” Ecological Economics 69(6): 1202–8. Tacconi, L. 2012. “Redefining Payments for Environmental Services.” Ecological Economics 73. Wunder, Sven. 2015. “Revisiting the Concept of Payments for Environmental Services.” Ecological Economics117: 234–43.
3	Week 3 This week we consider conservation offsets and compare them with PES	Biodiversity Conservation Trust. 2018. Annual Report 2017-18. Sydney. Coggan, Anthea, Stuart M. Whitten, and Famiza Yunus. 2006. Conservation Incentive Design. Canberra. Vaissière, Anne-Charlotte et al. 2020. “Biodiversity Offsets and Payments for Environmental Services: Clarifying the Family Ties.” Ecological Economics 169(July): 106428.
4	Week 4 This week we discuss the key design elements of PES schemes, considering both theoretical as well as practical issues	Suhardiman, Diana, Dennis Wichelns, Guillaume Lestrelin, and Chu Thai. 2013. “Payments for Ecosystem Services in Vietnam?: Market-Based Incentives or State Control of Resources??” Ecosystem Services 6: 64–71. http://dx.doi.org/10.1016/j.ecoser.2013.06.006. Tacconi, L. 2015. Regional Synthesis of Payments for Environmental Services (PES) in the Greater Mekong Region. Working Paper 175. Bogor: Center for International Forestry Research. Wunder, S et al. 2018. “From Principles to Practice in Paying for Nature’s Services.” Nature Sustainability1(March): 145–50.
5	Week 5 This week we address some of the criticisms that have been raised about PES schemes. Like any policy tool, PES does have some constraints that need to be understood and addressed	Chan, Kai M.A. et al. 2017. “Payments for Ecosystem Services: Rife With Problems and Potential—For Transformation Towards Sustainability.” Ecological Economics 140: 110–22. Norgaard, Richard B. 2010. “Ecosystem Services: From Eye-Opening Metaphor to Complexity Blinder.”Ecological Economics 69(6): 1219–27. Vatn, Arild. 2010. “An Institutional Analysis of Payments for Environmental Services.” Ecological Economics69(6): 1245–52. Wunder, Sven. 2013. “When Payments for Environmental Services Will Work for Conservation.” Conservation Letters 6(4): 230–37.
6	Week 6 This week we consider the factors that affect the efficiency and equity of PES schemes, and whether there are trade offs between efficiency and equity	Börner, Jan, Sven Wunder, and Renzo Giudice. 2016. “Will Up-Scaled Forest Conservation Incentives in the Peruvian Amazon Produce Cost-Effective and Equitable Outcomes?” Environmental Conservation 43(4): 407–16. Pascual, Unai, Roldan Muradian, Luis C Rodríguez, and Anantha Duraiappah. 2010. “Exploring the Links between Equity and Ef Fi Ciency in Payments for Environmental Services?: A Conceptual Approach.” Ecological Economics 69(6): 1237–44. Wunder, Sven. 2007. “The Efficiency of Payments for Environmental Services in Tropical Conservation.” Conservation Biology 21(1): 48–58.
7	Week 7 This week we consider the factors that affect people's participation in PES schemes and the implications for their design	Arriagada, Rodrigo A., Erin O. Sills, Subhrendu K. Pattanayak, and Paul J. Ferraro. 2009. “Combining Qualitative and Quantitative Methods to Evaluate Participation in Costa Rica’s Program of Payments for Environmental Services.” Journal of Sustainable Forestry 28(3–5): 343–67. Lastra-bravo, Xavier B, Carmen Hubbard, Guy Garrod, and Alfredo Tolo. 2015. “What Drives Farmers ’ Participation in EU Agri-Environmental Schemes??: Results from a Qualitative Meta-Analysis.” Environmental Science & Policy 54: 1–9. Rios, Ana R, Inter-american Development Bank, and Stefano Pagiola. 2011. “Poor HousehPold Participation in Payments for Environmental Services in Nicaragua and Colombia.” In Payments for Environmental Services, Forest Conservation and Climate Change: Livelihoods in the REDD?, eds. Luca Tacconi, Sango Mahanty, and Helen Suich. Cheltenham: Edward Elgar.
8	Week 8 This week we discuss how to determine the amount that should be paid to the participants in a PES scheme. We understand how auctions work we use a role play in which students are potential PES participants	Ferraro, Paul J. 2007. “Asymmetric Information and Contract Design for Payments for Environmental Services.” Ecological Economics 5: 810–21. Jindal, Rohit, John M Kerr, Paul J Ferraro, and Brent M Swallow. 2013. “Land Use Policy Social Dimensions of Procurement Auctions for Environmental Service Contracts?: Evaluating Tradeoffs between Cost-Effectiveness and Participation by the Poor in Rural Tanzania.” Land Use Policy 31: 71–80. Pagiola, Stefano. 2008. “Payments for Environmental Services in Costa Rica.” Ecological Economics 65(4): 712–24. Whitten, Stuart M, Andrew Reeson, Jill Windle, and John Rolfe. 2013. “Designing Conservation Tenders to Support Landholder Participation?: A Framework and Case Study Assessment.” Ecosystem Services 6: 82–92
9	Week 9 This week we discuss the role of PES in addressing poverty and livelihood concerns, and consider evidence on their impacts	Blundo-Canto, Genowefa et al. 2018. “The Different Dimensions of Livelihood Impacts of Payments for Environmental Services (PES) Schemes: A Systematic Review.” Ecological Economics 149(March): 160–83. Pagiola, S, A Arcenas, and G Platais. 2005. “Can Payments for Environmental Services Help Reduce Poverty? An Exploration of the Issues and the Evidence to Date from Latin America.” World Development33(2): 237–53. Tacconi, L., S. Mahanty, and H. Suich. 2013. “The Livelihood Impacts of Payments for Environmental Services and Implications for REDD+.” Society and Natural Resources 26(6). Zheng, Hua et al. 2013. “Benefits, Costs, and Livelihood Implications of a Regional Payment for Ecosystem Service Program.” Proceedings of the National Academy of Sciences 110(41): 16681–86.
10	Week 10 This week we analyse practical challenges faced in the design and implement of PES, including governance, politics, and funding availability.	Blackman, Allen, and Richard T Woodward. 2010. “User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower.” Ecological Economics 69(8): 1626–38. Coq, Jean-françois Le et al. 2015. “Understanding the Governance of the Payment for Environmental Services Programme in Costa Rica?: A Policy Process Perspective.” Ecosystem Services 16: 253–65. OECD. 2010. Paying for Biodiversity -Enhancing the Cost-Effectiveness of Payments for Ecosystem Services. Organisation for Economic Co-Operation and Development. Pagiola, Stefano. 2008. “Payments for Environmental Services in Costa Rica.” Ecological Economics 65(4): 712–24.
11	Week 11 This week students present their draft research papers
12	Week 12 This week we discuss how the effectiveness of PES schemes has been assessed and the findings so far	Arriagada, Rodrigo A. et al. 2012. “Do Payments for Environmental Services Affect Forest Cover? A Farm-Level Evaluation from Costa Rica.” Land Economics 88(2): 382–99. Börner, Jan et al. 2017. “The Effectiveness of Payments for Environmental Services.” World Development 96: 359–74. Kleijn, D. et al. 2006. “Mixed Biodiversity Benefits of Agri-Environment Schemes in Five European Countries.” (March): 243–54. Pattanayak, Subhrendu K, Sven Wunder, and Paul J Ferraro. 2010. “Show Me the Money: Do Payments Supply Environmental Services in Developing Countries?” Review of Environmental Economics and Policy 4(2): 254–74.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Essay on theory	15 %	20/03/2020	03/04/2020	1
Case study analysis	35 %	20/04/2019	03/05/2020	2, 3
Presentation	10 %	21/05/2020	25/05/2020	5
Research assignment	40 %	31/05/2020	02/07/2020	1,2,3,4

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

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Assessment Task 1

Essay on theory

The details of the task and the assessment criteria are available on Wattle

Assessment Task 2

Case study analysis

The details of the task and the assessment criteria are available on Wattle

Assessment Task 3

Presentation

The details of the task and the assessment criteria are available on Wattle

Assessment Task 4

Research assignment

The details of the task and the assessment criteria are available on Wattle

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