Adopting Payment For Ecosystem Services at Scale

Ecosystem services are the benefits humans derive from nature, essential for sustaining life and well-being on the planet. These services encompass a wide range of functions, including the provision of food, water, carbon, soil and temperature regulation. Additionally, ecosystems offer cultural services such as recreation, spiritual enrichment, and aesthetic enjoyment. 

Payment for Ecosystem Services (PES) is a voluntary one-way transaction contract in which users of ecosystem services (buyers) pay to landowners in exchange for managing their land or natural resources in ways that preserve or enhance those services. Two important characteristics of PES schemes are that they are (1) conditional—payments are made only if the agreed-upon activities or services are delivered—and (2) voluntary—both providers and beneficiaries enter into the agreement willingly. 

Catalyzing PES adoption

J-PAL Latin America and the Caribbean (LAC) is working to strengthen the design and implementation of Payment for Ecosystem Services (PES) programs across the region by:

  • Sharing evidence: Engaging with policymakers, practitioners, and partners to provide the latest research findings that can enhance the impact and cost-effectiveness of PES initiatives.
  • Applying evidence and generating new knowledge: Coordinating and conducting research projects in Latin America and the Caribbean to deepen understanding of what works, and translating results into actionable insights for decision-makers.
  • Fostering collaboration: Creating spaces for governments, researchers, and other stakeholders to exchange experiences, provide technical support, and learn from each other.

Sharing evidence on PES

Payments for Ecosystem Services (PES) are conditional cash transfers that reward landholders and communities to protect nature, instead of cutting or burning it down. Research has shown that well-designed PES programs can significantly slow deforestation, enhance tree cover, and protect ecosystems at a low cost.

The data shows PES programs can deliver impressive benefits, or returns, per ton of CO2 abated relative to the costs. One study reviewing cost data on a wide range of policies found PES has one of the highest benefit-to-cost ratios of climate policies, with Uganda seeing $4 in benefits (from reduced carbon emissions) for every dollar spent, Mexico achieving $6, and programs to slow crop burning delivering $5.7. In comparison, appliance rebates and wind energy offsets generate $0.79 and $3.30 per dollar spent. 

Many governments and companies already use these programs, but design flaws, inadequate targeting contracting and setting benefit levels often limit their impact. Randomized evaluations in Uganda, Mexico, Malawi, and India show that simple fixes —like upfront payments, better targeting, and full land enrollment— can help increase impacts and cost-effectiveness of PES programs.

And although research results provide strong evidence that PES can drive conservation, there is still much to learn about how to maximize their impact. Innovations in PES—such as adapting payments to protect community-managed or public land, tailoring programs to new contexts, or scaling up proven models—offer opportunities to refine and expand their effectiveness.

Applying evidence and generating new knowledge

  • Adapting PES programs in Guatemala. Guatemala’s Ministry of Environment (MARN) is developing a new forest policy, reviewing existing incentive schemes, and considering new PES that actively involve Indigenous communities and rural populations. Since the success of these programs depends on implementation details, J-PAL has secured funding to help MARN tailor PES design to Guatemala’s context, incorporating global evidence and political economy insights to foster community engagement.
  • Redesigning Payments for Ecosystem Services in Mexico to Increase Cost-effectiveness. This project studied whether a PES program in Mexico cost-effectiveness could be increased by requiring PSA participants to enroll all or most of their eligible forested landholdings (i.e. full enrollment requirement). The study found that full-enrollment approach led to a substantial decrease in deforestation compared to the traditional contract, resulting in a fourfold increase in the program’s cost-effectiveness. Researchers are currently working with the Mexican government to test this approach on a larger scale, aiming to inform national policy.
  • PES to Reduce Deforestation in Communal Forestland in Liberia. With communal property, it is difficult to target and calibrate payments to households: the most scalable and contextually appropriate solution in Liberia relies on local community leadership to allocate payments within communities. Researchers will design and evaluate a PES program to compensate communities in Liberia for conserving collective forestland, including both conservation and governance conditions in the PES contract.

Fostering Collaboration: CoP-PES LAC

The objective of the Community of Practice on Payment for Environmental Services in Latin America and the Caribbean  (CoP-PES LAC) is to advance evidence-based PES programs in the region. To do so, CoP-PES LAC fosters  collaboration and knowledge-sharing among diverse stakeholders involved in implementing or promoting PES as a conservation strategy. By drawing on collective insights and experiences, members can address common challenges—such as how to meaningfully engage with rural communities and Indigenous populations and accelerate their uptake into these programs.

Leading organizations

The Nature Conservancy and J-PAL LAC are actively supporting governments across Latin America and the Caribbean in the implementation and strengthening of PES programs. Together, they have taken on the role of leading organizations for CoP-PES LAC, with the goal of providing expert guidance and fostering peer-to-peer learning among its members.

Logos - The Nature Conservancy and J-PAL LAC

Member organizations

The CoP is formed by organizations that are planning to implement or are implementing PES programs. Their involvement consists mainly in sharing their experiences with their peers, bringing in their concerns for discussion, and, if needed, collaborating with academics and the leading organizations to improve the implementation of their programs.

CoP-PES LAC is an open initiative and we invite governments and organizations working across the region to join. 

Community of Practice Activities in 2025

In-Person Workshop: Economic incentives to recognize and reward ecosystem services – March 27, 2025
We had an in-person event gathering with PES practitioners and stakeholders from Ecuador, Guatemala, Chile, Argentina and Brazil. The event featured opening remarks by Nobel laureate and J-PAL co-founder Esther Duflo, a session on PES evidence by J-PAL staff, and a presentation from Chile’s Ministry of Environment. Discussions focused on three key areas: legal frameworks, funding strategies, and community engagement. Similar sessions are planned in other countries.

Webinar: Enhancing Climate Finance Access for Indigenous Peoples and Local Communities: Insights From PES - September 4th, 2025
Building on the in-person event, a series of virtual meetings will be held, focusing on common challenges and featuring expert input as well as peer learning. The first of these sessions will include a presentation by experts around actionable insights to tackle contextual and structural barriers related to PES implementation, and a discussion based on lessons learned by stakeholders across the region.

Join CoP-PES LAC

We are sharing evidence with several stakeholders in an effort to build a regional community of governments and organizations working to launch PES programs in real-world settings. 

If you are interested in joining, please contact us at [email protected].