We derive a wide range of benefits from how we use the land; it underpins our economic prosperity, supports the provision of essential supplies of food and clean water. Its sustainable management is essential to how we reduce our greenhouse gas emissions, and adapt to a changing climate.

‘Payment for Ecosystem Services’ schemes have been developed in a broad range of areas that seek to support good environmental management. Common to all the schemes is that they take a voluntary approach to offering financial incentives to land-managers for actions that maintain or enhance services that are not routinely bought and sold or provided through regulation.

The characteristics of different ‘Payment for Ecosystem Services’ schemes vary considerably. For the purposes of meeting climate change needs, ‘Payment for Ecosystem Services’ has substantial potential but with several key issues:

  • The degree to which participation by actors, particularly providers can be facilitated.
  • The type of scheme (inputs or outcomes based), the structural arrangement for the relationships between actors and how well it fits with the objectives.
  • How well the scheme balances the need for supply of other ecosystem services (and biodiversity).