Trends and Future Potential of Payment for Ecosystem Services to Alleviate Rural Poverty in Developing Countries

Payment for ecosystem services (PES) is a market-based approach to environmental management that compensates land stewards for ecosystem conservation and restoration. Because lowincome households and communities control much of the ecologically sensitive land in developing countries, they potentially stand to gain from PES, as environmentally responsible stewardship is assigned a value by various actors in society. To date, however, instances of PES benefiting the poor have been limited mainly to specific localities, small-scale projects, and a handful of broader government programs. We analyze the size, characteristics, and trends of PES to evaluate its future potential to benefit low-income land stewards in developing countries. We estimate that by the year 2030, markets for biodiversity conservation could benefit 10-15 million low-income households in developing countries, carbon markets could benefit 25-50 million, markets for watershed protection could benefit 80-100 million, and markets for landscape beauty and recreation could benefit 5-8 million. If payments and markets reach these potentials, they could provide a non-negligible contribution to poverty alleviation at the global level.