Payment for Ecosystem Services

Payments for Ecosystem Services (PES), also known as payments for environmental services (or benefits), are incentives offered to farmers or landowners in exchange for managing their land to provide some sort of ecological service. The principle behind (PES) is that those who provide ecosystem services – like any service – should be paid for doing so.

We are on the cusp of enormous change in agri-environment policy, as we leave the EU and the Common Agricultural Policy. It is no exaggeration to say that this new direction could revolutionise the management of rural land. While PES is a concept that policy-makers are fond of, much of the literature pays little attention to private land managers and owners, the factors that will influence their behaviour, or the nature of legal relationships being created. Yet they are fundamental to the actual practical delivery of the entire concept. The success, or failure, of PES will depend on its practical implementation.

The Black Mountains Land Use Partnership (BMLUP) is a pathfinder in this emerging area of work and research, and developing a PES portfolio breaks new ground for the Partnership. BMLUP has begun the task of contemplating how these schemes could operate in practice, the nature of legal relationships created in a PES transaction, and the opportunities and consequences for land managers. We have invested a considerable part of our Sustainable Management Scheme project to understanding the practicalities of PES delivery in the Black Mountains, recording the lessons learnt as we go and highlighting issues that are of most importance to stakeholders.

One of the key lessons from this project to date, when considering the design and operation of any private PES scheme, is the relationship with public subsidy schemes. Both the UK and Welsh Governments have committed to new subsidy schemes that encourage and promote private investment in ecosystem service provision. How this will happen in practice is not yet clear. Therefore, we have shown how public and private funding schemes interact, and, based on our experience working with the Black Mountains Land Use Partnership, we have identified a number of considerations for the design of the Welsh Government’s Public Goods Scheme. We have also developed a PES prospectus defined by what services are identifiable, quantifiable and manageable within a PES scheme and for which the key stakeholders, (principally the landowners and graziers in the Project Area) are confident that a pathfinder approach towards marketing them is achievable, either during the lifetime of the project or at an identified future point.