Payments for environmental services in watersheds: Insights from a comparative study of three cases in Central America

We have compared three cases of payments for water-related environmental services (PES) in Central America, in terms of socioeconomic background, opportunity costs of forest conservation and stakeholders' perceptions of the conditions of water resources and other issues. We found that, in general, the opportunity costs are larger than the amounts paid, which apparently contradicts the economic foundation of PES schemes and suggests that the role of intangibles is important in inducing participation. The results also show that trade-offs between different environmental and social goals are likely to emerge in PES schemes, posing some doubts as to their ability to be multipurpose instruments for environmental improvement and rural development. We also found that PES schemes may work as a conflict-resolution instrument, facilitating downstream-upstream problem solving, though at the same time they might introduce changes in social perceptions of property rights. (c) 2006 Elsevier B.V. All rights reserved.