Payments for ecosystem services and the rural economy

The popular view of the decline of farming as a consumption shift in the rural economies of developed countries places emphasis on the amenity value of rural landscapes. Similarly, food quality rather than quantity, and the potential of managing land for water quality and flood regulation have gained significance. While attributes of amenity value, food quality and reduced flood risk can be described as non-market goods (or services), their consumer demand suggests that to secure their production they should incur a price. The notion of ecosystem services (ES, chapters 9 and 47 in this volume) offers a way of articulating the benefit that societies derive from healthy and diverse ecosystems. Payments for the provision of such ES connect the demand for the benefits they provide and the management practices that support them. Payments for providing (or maintaining) ES can be calculated in a range of ways and between a range of parties depending on where and how the ES are produced and who they benefit. In a developing country context, PES can provide sustainable alternatives to existing livelihood strategies and enhance local embeddedness. Nevertheless, much criticism has been levelled at the scientific validity and ethics of assigning monetary value to complex ‘services’ such as habitat or freshwater provision. Yet, many suggest that this is instrumental in achieving socially just conservation outcomes and crucial for recognising the value of the natural capital on which our economies depend. The chapter critically examines the opportunities and challenges of linking the management of ES to economic opportunity.