Adapting PES Programs in Guatemala

Guatemala loses around 61,000 hectares of forest each year, driving biodiversity loss, ecosystem degradation, and high carbon emissions—60% of the national total. The main causes are unsustainable resource use and the expansion of agriculture and livestock. Addressing this requires interventions that align environmental conservation with economic incentives. Payments for Ecosystem Services (PES) programs offer a promising solution by compensating landowners and communities for maintaining forest cover. Evidence shows that well-designed PES programs can reduce deforestation, increase tree cover, and deliver strong environmental returns at relatively low cost. Design choices—like requiring full land enrollment, targeting high-risk areas, and offering upfront payments—are crucial to effectiveness. Guatemala’s Ministry of Environment (MARN) is developing a new forest policy, reviewing existing incentive schemes and considering new PES initiatives for indigenous communities. However, the success of these programs depends on implementation details that are currently overlooked. We are seeking funding to help MARN tailor PES design to Guatemala’s context, incorporating global evidence and political economy insights on community engagement. Indigenous populations—44% of the population and key stewards of forested areas—must be meaningfully involved. Our support will also connect MARN with a wider PES community of practice, including governments, NGOs, and experts with implementation experience across Latin America.