Payments For Ecosystem Services Research Articles

Community forestry in a changing context: A perspective from Nepal’s mid-hill

Community forestry (CF) is one of the major forest management modalities in the world. A growing body of literature documents various outcomes and interactions of people with CF, but limited studies have assessed the mode of forest-people interaction considering changing socio-economic and environmental contexts by employing a broader theoretical framework. Our study employed Ostrom’s social-ecological system (SES) framework accompanied by a meta-synthesis of peer-reviewed literature (n = 74), review of policy documents and census reports (n = 28), interviews with four stakeholder groups (n = 47) and group discussions with district-level forest user groups (n = 20), to explore the changed context in Nepal’s mid-hills since 1990 s. The study revealed transformational changes in socio-economic and environmental contexts of Nepal’s mid-hills compared to the conditions in which the CF was developed during 1990 s. Changes in the forces (or factors) of SES, including demography, socio-economic development, government policy and environmental discourse are so pronounced that its feedback to the social-ecological system is discernible. For example, the evolving dynamics have changed the mode of forest-people interaction and their relationship by altering land use practices, resource use patterns, farm-forestry linkage, and pool of human resources, which is reflected in diminishing participation, social capital, collective action, and (voluntary) contribution to CF management. Such (emerging) dynamics in the social-ecological system could further jeopardise CF institutions and their deliberation, weaken the forest-food security nexus, augment leadership gaps in forest management, and impede the country’s efforts in achieving global climate and development goals. To revitalize CF in this changing context, we suggest that community forests should be managed in three different models: urban, protection and production by putting payment of ecosystem services in place. As Nepal is a global leader in CF and its policies are informing forest and land use policies around the world, the outcomes of our study could offer an insight to the decision-makers of other countries for recalibrating land use policies by considering evolving local and global dynamics and their feedback to SES.

Vietnam's Payments for Forest Ecosystem Services scheme's puzzling role in protecting longstanding forests as deforestation rates rise

Research on payments for ecosystem services (PES) schemes indicates that few of them in fact implement full marketization, highlighting the need for better understanding of the performance of incompletely marketized PES models. One prominent example of a PES program with limited marketization is Vietnam's Payments for Forest Environmental Services (PFES) scheme, a payment for environmental services program that has been progressively rolled out in 45 provinces since 2008. The program is notable both for its spatial extent and governance structure, collecting funds primarily from taxes on water consumption in hydroelectric dams and water companies, which are then redistributed via contracts managed at provincial and national levels to protect, restore, and plant new forests. We assess the impact of PFES's impact on longstanding forest loss using matched two-way fixed effects models and matched multi-period difference-in-differences estimation. These methods both suggest that PFES restrains forest loss at a rate comparable to or greater than state-managed protected areas but impacts are weak or nonexistent until PFES has been established for over three years. Taken together, these findings provide further evidence PES-like programs can perform well in forest protection even if they lack full marketization.

Sustained participation in a Payments for Ecosystem Services program reduces deforestation in a Mexican agricultural frontier

Payments for Ecosystem Services (PES) provide conditional incentives for forest conservation. PES short-term effects on deforestation are well-documented, but we know less about program effectiveness when participation is sustained over time. Here, we assess the impact of consecutive renewals of PES contracts on deforestation and forest degradation in three municipalities of the Selva Lacandona (Chiapas, Mexico). PES reduced deforestation both after a single 5-year contract and after two consecutive contracts, but the impacts are only detectable in higher deforestation-risk parcels. Enrollment duration increases PES impact in these parcels, which suggests a positive cumulative effect over time. These findings suggest that improved spatial targeting and longer-term enrollment are key enabling factors to improve forest conservation outcomes in agricultural frontiers.

Measurement and Influencing Factors of Willingness to Accept Payment for Ecosystem Service Provision: A Case Study of a Leading Forest Farm in China

The Saihanba Forest Farm, a leading planted forest farm, is one of the essential ecosystem service providers for the Beijing–Tianjin–Hebei region in China. Its efforts in afforestation and landscape restoration have been recognized with the award of the Champions of the Earth from the United Nations. However, the Saihanba Forest Farm is facing the challenges of less income resulting from less commercial cutting since it has to prioritize providing ecosystem services such as water conservation, wind prevention, sand fixation, and so on, instead of timber. It is crucial to understand providers’ attitudes toward ecosystem service provision and willingness to accept payment, as it might affect the quantity and quality of ecosystem service provision in the future. In this study, the contingent valuation method was applied to measure the willingness to accept payment for the economic losses incurred due to providing ecosystem services by cutting less wood. A questionnaire survey was conducted among the staff of the Saihanba Forest Farm. A double-hurdle regression model was used to analyze the influencing factors of the willingness to accept payment, with the validation via a Tobit model. The results showed that the Saihanba Forest Farm was willing to accept a payment of CNY 9800.84 (USD 1407.24) per hectare per year for providing ecosystem services to enhance social welfare. The factors, including basic sociodemographic characteristics, attitudes toward conservation activities, and awareness on the concept of payment for ecosystem services, significantly influenced their willingness to accept payment.

Community-based incentive coordination in payments for ecosystem services: China’s Wolong Nature Reserve

Community-based Payments for Ecosystem Services (CB-PES) have received continued attention because of their ability to help Payments for Ecosystem Services (PES) improve local outcomes and sustain community support. This study scrutinizes the role of community-based incentive coordination in PES using the case of China’s Wolong Nature Reserve (WNR). Combining theoretical modeling and empirical analysis of the WNR, this study demonstrates that CB-PES can deploy a range of incentive-coordinated techniques and practices, eventually improving economic outcomes for stakeholders and environmental benefits for society. In addition, this study also highlights the fact that CB-PES aiming to achieve incentive coordination rely on participatory intermediary governance. Finally, designing community-based incentive coordination mechanisms in PES remains challenging, as it also depends on coordinated conservation efforts to optimize the economic outcomes and environmental benefits of PES.

A systematic review on the impact of incentives on the adoption of conservation agriculture: new guidelines for policymakers and researchers

ABSTRACTFacing the new challenges of sustainable development in the agricultural sector requires transitioning toward sustainable systems, such as conservation agriculture (CA) practices. Despite several decades of work to diffuse CA technologies, the adoption rate remains below expectations in several countries. Different policy scenarios have been adopted to address this situation, mainly incentives. However, evidence of their effectiveness and possibilities of reinforcement are not clearly defined in the literature. The purpose of this systematic review is to examine the evidence of the impact of incentives on the adoption of conservation agriculture practices to help academics and politicians understand how to effectively spread sustainable innovations such as CA. Results show that four kinds of incentives are evaluated Agri-Environment Schemes (AES)/Payments for Ecosystem Services (PES), input subsidies, direct subsidies, and market-based incentives. The impact of PES and input subsidies was significant and positive for the diffusion of CA. However, the component of minimum tillage dissemination was not significantly affected by PES agglomeration payments or greater levels of direct subsidies, respectively. The incentives investigated are not sufficiently diversified in type, which consequently limits their usefulness. Three recommendations for the deployment of incentives were made in light of these findings.

Measuring ecosystem services supply and demand in rural areas: cases from China's key counties to receive assistance in pursuing rural revitalization.

There is a considerable challenge to meeting the Sustainable Development Goals (SDGs) of ending poverty and maintaining ecosystems' function in rural areas, largely due to that the rural people's livelihood relied heavily on fragile ecosystems. China is ambitious to solve this issue by enacting economic stimulus policies such as ecological protection compensation and payment for ecosystem services (ESs). However, these interventions are generally based on stockholders' willingness and lack of scientific basis. Here, we firstly combined InVEST model and social-economic data to evaluate the ecosystem services supply and demand (ESSD), by taking 25 key counties to receive assistance in pursuing rural revitalization in Sichuan province as the study cases. The coupling coordination degree model was then employed to measure the coordination relationship of ESSD. Finally, the driving factors were analyzed based on correlation analysis and stepwise regression method. The results showed that all ESs, except carbon sequestration, were oversupplied with significant spatial heterogeneity. From 2000 to 2020, the supply of all ESs increased, in which the food production had the most notable increase ratio amounting to 48.20%, while the demand of water retention and air purification decreased substantially. Due to the inconsistency between cultivated land area and population changes, significant spatial heterogeneity existed in the coordination relationship of food production. The counties with the highest and the lowest annual average coordination index were Yanyuan (0.9950) and Rangtang (0.1208), respectively. The rural employees and the agricultural gross output value were the key positive factors influencing the quantity and coordination of ESSD, while ecological compensation and financial expenditure had no significant impact, further indicating that these policies were not linked to the performance of ecosystems' function. Finally, policy implications were raised. This study provides a scientific framework for enacting the interventions towards ecological sustainability and poverty ending from ESSD perspective.

Creating synergies between payments for ecosystem services, green bonds, and catastrophe insurance markets for enhanced environmental resilience

This study explores the potential of promoting sustainable land utilization practices through leveraging financial tools like green bonds, payment for ecosystem services (PES), and catastrophe insurance. In the proposed framework, a private manager issues green bonds to fund the replacement of degraded grasslands with forests, delivering the added advantages of replenishing stream water and protecting downstream hydropower plants from flooding. The downstream community engages in a PES agreement to enhance their water supply, while the hydropower plant secures flooding insurance from the manager, who utilizes green bond funding to cover potential damages following flooding. The study formulates a dynamic optimization model for the allocation of green bonds to support oak tree-led afforestation, ultimately bolstering the resilience of downstream communities and the power infrastructure. Results suggest that this green bond-based strategy holds promise for expeditious replacement of degraded grasslands with forests and can enhance ecosystem resilience by encouraging sustainable land use transformations. Furthermore, the research uncovers the potential for synergistic interactions between PES, green bonds, and catastrophe insurance markets. PES programs can also assist in repaying investments made through green bonds, while green bonds enable faster afforestation, leading to increased income from PES and improved resilience against flooding events.

Allocating payments for ecosystem services under future multiple scenarios in the Yellow River Basin, China

Reasonable payments of Ecosystem Services (PES) standards are crucial to provide eco-environment management countermeasures. However, existing research on the unified coordination of future PES from the overall perspective is insufficient. This paper proposes a framework derived from the patch-generating land-use simulation (PLUS) model and the ecosystem services value (ESV) assessment method for allocation PES funds. The Yellow River Basin (YRB) was taken as a case study, which is a highly integrated and interconnected entity. The PLUS model was used to analyze various land-use situations from 2010 to 2020, and predict future land-use status under different development scenarios including natural development (ND), cropland conservation (CC) and ecological conservation (EC). The ESV approach was applied to calculate the ESV in nine provinces of the YRB, and propose optimized fund distribution schemes. The results showed that (1) The most significant land-use changes during 2010–2020 were impervious, forests, grasslands, and croplands, where the impervious increased by 22.47 % (4642 km2) and the forest increased by 9 % (7623 km2). (2) The total ESV in the YRB will be highest under EC scenario in 2030, at 729.16 billion CNY, and Qinghai, Sichuan, Gansu and Shandong will have the highest ESV under EC scenario. (3) The funds will reach lowest under EC scenario, at 13.35 billion CNY, while reach highest under CC scenario, at 13.58 billion CNY. (4) In any scenario, Qinghai and Gansu province will get the highest PES funds among nine provinces, and financial investment in the Qinghai Province needs to be increased. Based on our results, it is recommended to foster the exploration of horizontal compensation between the downstream provinces of Henan and Shandong, and the upstream provinces of Qinghai, Sichuan, and Gansu, in order to enhance the protection of the eco-environment. The findings can provide scientific guidance for improvement of the PES funds allocation in the YRB, and methodological references for other river basins.

Payment for Ecosystem Services: An Efficient Approach to Reduce Eutrophication?

The CPES (Channel Payments for Ecosystem Services) project developed PES schemes remunerating farmers for their activities in improving water quality by reducing the emissions of nutrients (both nitrogen and phosphorus) or erosion from agricultural activities. Catchment-wide approaches were tested in six case studies, and ecology, hydrogeology, agroeconomy, law, and farming expertise was combined. Collaborations were established with farmers, their associations, chambers of agriculture, and local and regional stakeholders. One case study concerned Lac au Duc (Brittany), a reservoir suffering from recurrent cyanobacterial blooms. Curative actions to control cyanobacteria had limited success. The main sources of excess P entering the lake were of farming origin but varied between the sub-catchments according to hydrogeological characteristics and agricultural practices. Long-term prevention possibilities to ameliorate agricultural practices and their costs were developed with the farmers and included permanent cover or anti-erosive hedges. During the project, PESs were successfully applied for ground water protection by the water supply companies as drinking water protection has a strong business case to preserve this ecosystem service. For recreational or multi-purpose lakes and reservoirs, it remains difficult to find financing to meet the monetary requirements to address farmer’s transition to ameliorate land management.

A Scientometric Analysis of Payments for Ecosystem Services Research: Mapping Global Trends and Directions

Payment for ecosystem services (PES) is an innovative economic intervention to mitigate the decline of ecosystem services and biodiversity; it plays a key role in harmonizing protection and development. Based on numerous PES practices worldwide, PES has emerged as a research hotspot in the field of sustainability. This paper presents a comprehensive scientometric analysis of PES academic publications between 1987 and 2022. The study aims to characterize the intellectual landscape of PES by identifying and visualizing the evolution of the collaboration network, the co-citation network, and emerging research trends. The findings reveal a rapid increase in publications of this field, indicating its growing importance as an interdisciplinary research subject. In particular, PES has gained significant attention from numerous researchers since 2007. Environmental sciences and ecology (50.77%) have been the core subjects, followed by business economics (11.04%) and biodiversity conservation (9.58%). Engineering (3.52%) and water resources (3.40%) have emerged as new fields in recent years. Notably, productive authors and institutions in this domain are primarily located in the United States, China, and the United Kingdom. However, fewer stable collaborations were found between China and European countries. Regarding the keywords, the most popular keywords of this topic were “ecosystem service” (1423), “conservation” (1324), and “biodiversity” (1029). By synthesizing the literature, this paper identifies pressing topics related to the effectiveness of PES, including the evaluation of effectiveness, efficiency assessment, and equity. Through an in-depth analysis, this paper elucidates global trends and directions in PES research. It is important to create a fair and efficient market that boosts the motivation and initiative of society to engage in PES initiatives, to increase investment in comprehensive PES projects, which helps improve the efficiency of fund utilization, especially concerning climate change mitigation. It is proposed to integrate natural sciences and social sciences to comprehensively assess the effectiveness of climate-friendly PES, which contributes to the sustainable development of PES research and application.

Allometric equations and carbon stocks assessment for Bambusa vulgaris Schrad. ex J.C.Wendl. in the bimodal rainfall forest of Cameroon

Over the last two decades, bamboo has received increasing attention owing to its socio-economic and environmental importance. Environmentally, bamboo plays an important role in carbon sequestration, thus enhancing climate change mitigation. In Cameroon, knowledge about the importance of Bambusa vulgaris Schrad. ex J.C.Wendl. to climate change mitigation is deficient, despite the fact that it is the most abundant bamboo species in Cameroon's Bimodal rainforest agroecological zone (Agroecological zone 5 - AEZ5). This study was initiated to develop allometric equations and estimate carbon stocks of B. vulgaris in Cameroon's AEZ5. The destructive, clump-based method was used for bamboo biomass data collection on 40 clumps and 86 culms. Regression analyses were performed to obtain allometric models for B. vulgaris biomass prediction which were used for B. vulgaris carbon stocks estimation in AEZ5. The best allometric model for culms was obtained when all predictive variables including age, diameter and height were considered into the model. For clump, the best model was obtained when the number of culms per clump, girth and average diameter were considered in the model. Model quality adjustment was better for clump aboveground biomass (AGB) compared to those of culm AGB. The model of B. vulgaris of the evergreen rainfall forest was validated with a bias of 45.5 %. Bamboo aboveground biomass proportions were 77 %, 15 % and 8 %, respectively for culms, branches and leaves. The mean density and carbon stocks of B. vulgaris were estimated at 2,0679 culms.ha−1, 257 clumps.ha−1, and 61.65 tC ha−1. B. vulgaris has a veritable carbon sequestration capacity which policymakers should consider in climate change mitigation strategies like those linked to payments for ecosystem services, voluntary carbon stocks market, Bonn Challenge, AFR100 initiative, and the Paris agreement ratified by the government of Cameroon.

Pricing rules for PES auctions: Evidence from a natural experiment

Payments for Ecosystem Service (PES) schemes increasingly use auctions to target funds to low-cost providers, aiming to increase value-for-money. To date, PES auctions have most often employed “Pay-as-Bid” (PaB) pricing, in which successful participants are paid the amount stipulated in their bid(s). Alternative pricing rules exist, such as the “Uniform Price” (UP) rule, in which successful bids receive the same per unit payment determined by the marginal bid. Despite being successfully applied in other settings, the use of UP pricing in PES auctions has been limited. We explore the impact of UP pricing in the context of a scheme incentivising farmers to reduce nutrient run-off. Following our intervention, the auction through which contracts were allocated to farmers switched from PaB to UP. Our analysis provides the first real-world, causal evidence on the effect of alternative auction pricing rules in this context. We find that UP pricing reduced mean bids, by 40%. A priori the impact on payments made to the farmers is ambiguous, yet we find these to be reduced by a similar amount. Moreover, the UP format reduces the incidence of costly bidding behaviours, updating and sniping, by approximately 50% and 30% respectively. These significant and substantial changes suggest wider adoption of UP pricing in PES auctions is likely warranted.

Fifteen years of research on payments for ecosystem services (PES): Piercing the bubble of success as defined by a Northern-driven agenda

Payments for ecosystem services (PES) have gained widespread prominence as a flagship solution for ecological challenges and attracts multi-billion-dollar annual investments. This large-scale meta-analysis analyzes the epistemic, methodological, and ethical–political assumptions of over 1,000 peer-reviewed articles on PES from 2005 to 2019. Results highlight that effectiveness of PES outcomes, design of PES policy, and market-based valuation of ecosystem services serve as predominant thematic focus areas for research. Considerations such as gender equality, power asymmetries, and the recognition of multiple relational values around human-nature interactions in PES, have received much less attention. Despite research recommendations from the literature emphasizing the need for greater social contextualization in future PES research, much of the literature remains decontextualized from political histories of the territory shaping local social and ecological relations. Results also demonstrate a clear presence of Global North institutions dominating where the scientific expertise on PES is assembled (representing 73% of studies), while 81% of studies collect their empirical data in the Global South. This asymmetry in where knowledge gets generated and extracted is mirrored by methodological homogeneity that risks reproducing a colonial bias of remote and universal expertise. The analysis also demonstrates the extent to which PES gets hyped as a proposed solution to ecological challenges often without any credible evidence. Decontextualized speculation around success, research that ‘helicopters’ into locations to introduce and make PES fit for purpose, and the highly asymmetrical control of the PES research agenda between Global North and South risks worsening social and ecological crises on the ground.

Balancing crop security and sustainable cropland use: Policy lessons from the Watershed Ecosystem Service Payments in Xin’an River, China

This study investigates the impact of Payments for Watershed Ecosystem Services (PWS) on the sustainable utilisation of cropland and crop security in Huangshan City, which is the primary implementation area for the Payments for Xin’an River Watershed Ecosystem Services pilot in China. Using a two-stage analytical framework along with a quasi-natural experiment, the research examines the policy’s effectiveness in Huangshan City. In the initial stage, the directional distance function and global Malmquist-Luenberger index (DDF-GML) model are employed to calculate the agricultural green total factor productivity (AGTFP), representing sustainable management of cultivated land. Concurrently, the study constructs unobservable counterfactual paths using the synthetic control method (SCM) to evaluate impacts on land use practices. The findings show an increase in Huangshan City’s AGTFP from 1.118 in 2010 to 1.823 in 2020. Quantitative assessments indicate that the policy contributed to a 15.3% rise in AGTFP in the PWS cohort compared to the control group. Though initial decreases were detected during three pilot intervals, a consistent upward trajectory in AGTFP was identified, suggesting that PWS encourages crop stability and the sustainable development of arable land. Further support from permutation, regional, and temporal placebo examinations affirm these conclusions. This work implies that PWS may be extended to other agriculturally vulnerable regions to foster a balanced alignment between sustainable growth and the enhancement of crop security The assessment focuses on policy lessons that could inform broader sustainability strategies.

Distribution of ecosystem service potential in marginal agroecosystems in a mosaic-type landscape under exploratory scenarios

ABSTRACT Land-use change in agriculturally marginal mosaic-type landscapes involves economic, environmental, and social aspects and can lead to social and economic problems in rural areas. This study focuses on the western part of Vidzeme Uplands, Latvia, which has been heavily impacted by rural depopulation and agricultural land abandonment. The research explores the value of low-intensity agroecosystems in agriculturally marginal landscapes using an ecosystem service approach. Three scenarios were developed: a ‘business as usual’ scenario, a ‘no subsidies’ scenario, and a ‘payments for ecosystem services’ scenario. The ‘business as usual’ scenario shows a pattern of subtle intensification, while the ‘no subsidies’ scenario predicts a significant loss of low-intensity agroecosystems and their services. The ‘payments for ecosystem services’ scenario estimates the safeguarding of essential regulatory ecosystem services, ensuring the potential supply of provisioning services, and maintaining the fragile structure of the marginal mosaic-type landscape.

Using payment for ecosystem services to meet national reforestation commitments: impacts of 20+ years of forestry incentives in Guatemala

International environmental initiatives, such as the Bonn Challenge and the UN Decade on Restoration, have prompted countries to put the management and restoration of forest landscapes at the center of their land use and climate policies. To support these goals, many governments are promoting forest landscape restoration and management through financial forestry incentives, a form of payment for ecosystem services. Since 1996, Guatemala has implemented a series of forestry incentives that promote active forest landscape restoration and management on private and communal lands. These programs have been widely hailed as a success with nearly 600 000 ha enrolled since 1998. However, there has been no systematic assessment of the effectiveness of these programs on preserving and restoring Guatemalan forests. This study evaluates the impacts of over 16 000 individual PES projects funded through two incentive programs using a synthetic control counterfactual. Overall, a program for smallholders resulted in lower rates of forest loss, while a program for industrial timber owners led to greater gains in forest cover. Across policies, we found dramatically higher forest cover increases from restoration projects (15% forest cover increase) compared to plantation and agroforestry projects (3%–6% increase in forest cover). Projects that protected natural forest also showed a 6% reduction in forest loss. We found forest cover increases to be under 10% of total enrolled area, although positive local spillovers suggest this is an underestimate. Restoration projects show the most promise at promoting forest landscape restoration, but these benefits need to be weighed against priorities like resilience and rural development, which may be better served by other projects.

A framework of payments for water-related ecosystem services (PWES) based on green water management

Green water describes precipitation that infiltrates into the unsaturated soil layer and returns to the atmosphere via plant transpiration and soil evaporation, which are two functions of the hydrological cycle. Green water provides the basis for timber growth, crop production, and ecosystem services. However, it has not been adequately accounted for in traditional payments for water-related ecosystem services (PWES), which predominantly consider on blue water and hence underestimate the availability of all water resources. In this study, a new framework of payments for green water-related ecosystem services (PGWES) is proposed based on green water management (GWM) and green water compensation (GWC). This framework is constructed with game theory modelling, hydrological simulation and scenario evaluation. Then, the Xiangjiang River Basin (XRB) is used as a case study to test and evaluate the feasibility of the framework. The results of this study are as follows: (a) the framework of PGWES and its game payoff matrix and optimal payoff function are improved by adding the GWM scenarios. This approach can identify the GWC standard and Pareto optimal solution in different GWM scenarios, thereby optimizing the spatial allocation of blue and green water in the river basin and coordinating conflicts of interest between the upstream and downstream. (b) The average Pareto optimal payoffs of the XRB are increased by 4390 million CNY/year under different GWM and GWC scenarios compared to the baseline scenario, and the average GWC standard is 2.41 CNY/m3 or 1305.98 CNY/hm2. The case study indicates that the socioeconomic and ecological benefits for the whole XRB are expected to significantly improve under this framework. (c) Three aspects of managing water resources and conflict of interest issues noted during the study include “broadening water sources”, “saving water resources” and “coordinating water conflict”. Green water resources are an important component in broadening water sources; green water management provides a basic measurement tool for saving water resources; and green water compensation based on game theory offers a possible way to coordinate water conflicts and should be given more attention. In general, the PGWES framework provides a referenced methodology for the efficient development and equitable allocation of blue and green water resources in the river basin; furthermore, this study provides a scientific basis for the theory and methods of PWES, thus enriching this field of research.

Socio-Hydrological Approach for Water Resource Management and Human Well-Being in Pinglin District, Taiwan

Despite being a limited resource, pollution, poor management, and other drivers like climate change make available water unsuitable and insufficient for human consumption and ecosystem maintenance. Therefore, a transdisciplinary approach is needed for managing this precious resource. The overall aim of this paper is to address water inequalities and improve human well-being using an integrated approach of key informant interviews, hydrological modeling, and the payment of ecosystem services (PES) scheme in Pinglin District, Taiwan. This site is an upstream area of Feicui Reservoir, which protects the downstream tap water supply. Key informant interviews were conducted to identify the gaps in and challenges to water resource management. This was followed by a scenario-based hydrological simulation using a Water Evaluation and Planning (WEAP) tool to project future water quality by the year 2050 (using biochemical oxygen demand and total coliform content as key indicator parameters) and to trace the factors responsible for water pollution. Survey analysis of key informant interviews depicts that this area is facing several challenges, such as lack of water infrastructure, agricultural subsidy, construction restrictions, etc., which cumulatively cause water scarcity in the upstream regions. On the other hand, hydrological simulation results show that population decline and climate change under an RCP 8.5 scenario will have an enormous negative impact on water quality. The concentrations of BOD and E. coli in river water will expand by 110.1% and 117.3%, respectively, by 2050 compared to 2018. Finally, the results of the study suggest that the PES scheme can play a positive role in enabling integrated water resource management. For example construction of a small-scale wastewater treatment plant in the upstream area will reduce the total E. coli concentration by up to 90%. While the initial cost of construction will be taken care of by the government, the operation and management cost of this infrastructure will be covered by people living downstream, who need to pay only $0.10 per year per person. The obtained results should be vital for both the stakeholders and decision-makers in this region.

Market-Based Instruments for Environmental Management: A Comparative Analysis

Market-Based Instruments (MBIs) have emerged as effective tools for environmental management, aiming to align economic decisions with environmental goals through the application of market principles and economic incentives. This paper presents a comprehensive review and comparative analysis of different MBIs, including Emissions Trading Schemes (ETS), Environmental Taxes, Subsidies and Grants, Tradable Permits, and Payments for Ecosystem Services (PES). The analysis examines the characteristics, effectiveness, and implications of each instrument, drawing insights from case studies and scholarly literature. Findings reveal that ETS and environmental taxes directly target emissions, while subsidies and grants promote environmentally friendly activities. Tradable permits enable efficient resource management, and PES programs compensate for the maintenance of ecosystem services. The choice of instrument depends on the specific context and environmental challenges, with a combination of instruments offering comprehensive environmental management strategies. The research provides valuable insights for policymakers and practitioners in designing effective environmental policies and contributes to the ongoing dialogue in the field of environmental economics.