Payments for ecosystem services (PES) policies compensate individuals or communities for undertaking actions that increase the provision of ecosystem services such as water purification, flood mitigation, or carbon sequestration. PES schemes rely on incentives to induce behavioral change and can thus be considered part of the broader class of incentive-or market-based mechanisms for environmental policy. By recognizing that PES programs are incentive-based, policymakers can draw on insights from the substantial body of accumulated knowledge about this class of instruments. In particular, this article offers a set of lessons about how the environmental, socioeconomic, political, and dynamic context of a PES policy is likely to interact with policy design to produce policy outcomes, including environmental effectiveness, cost-effectiveness, and poverty alleviation.environmental policy ͉ incentive payments ͉ market-based instruments

As global efforts to protect ecosystems expand, the socioeconomic impact of protected areas on neighboring human communities continues to be a source of intense debate. The debate persists because previous studies do not directly measure socioeconomic outcomes and do not use appropriate comparison groups to account for potential confounders. We illustrate an approach using comprehensive national datasets and quasi-experimental matching methods. We estimate impacts of protected area systems on poverty in Costa Rica and Thailand and find that although communities near protected areas are indeed substantially poorer than national averages, an analysis based on comparison with appropriate controls does not support the hypothesis that these differences can be attributed to protected areas. In contrast, the results indicate that the net impact of ecosystem protection was to alleviate poverty.conservation policy | poverty | empirical evaluation | protected areas | ecosystems

Protected areas are the dominant approach to protecting biodiversity and the supply of ecosystem services. Because these protected areas are often placed in regions with widespread poverty and because they can limit agricultural development and exploitation of natural resources, concerns have been raised about their potential to create or reinforce poverty traps. Previous studies suggest that the protected area systems in Costa Rica and Thailand, on average, reduced deforestation and alleviated poverty. We examine these results in more detail by characterizing the heterogeneity of responses to protection conditional on observable characteristics. We find no evidence that protected areas trap historically poorer areas in poverty. In fact, we find that poorer areas at baseline seem to have the greatest levels of poverty reduction as a result of protection. However, we do find that the spatial characteristics associated with the most poverty alleviation are not necessarily the characteristics associated with the most avoided deforestation. We show how an understanding of these spatially heterogeneous responses to protection can be used to generate suitability maps that identify locations in which both environmental and poverty alleviation goals are most likely to be achieved.

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