Payments for Environmental Services and Poverty Reduction: Risks and Opportunities

Should market efficiencies or social objectives drive the design of Payment for Environmental Services (PES) schemes? 

This issues paper challenges the notion that markets should solely drive PES schemes, given the emerging evidence of how PES can impact the livelihoods of the rural poor. Blindness to social welfare can fuel the very real risk of adverse social outcomes, and result in missed opportunities to improve the circumstances and opportunities of the rural poor.