How much is nature worth?: the system of payment for environmental services

Abstract

This article analyzes the system of payment for environmental services as an economic instrument of environmental protection. To do so, first there is an analysis of ecological economics, which is a presupposition of the system of payment for environmental services, and later on a comparative analysis between the command and control and economic instruments and their effectiveness and cost-effectiveness in environmental preservation. Upon this basis, we pass to the analysis itself of the payment of environmental services, the definition of environmental services and the complex issues of who should be the recipients of this benefit and the valuation of the service. It is also listed the main criticism of the system of payment for environmental services and finally it is presented examples of international payment programs for environmental services, as well as national initiatives. It is concluded, finally, that the payment of environmental services is not a magic solution to the environmental crisis, but it is a mechanism to correct the market failure that does not recognize the intrinsic value that nature has and the benefits it brings to the well being of society. The system of payment for environmental services if well planned and designed, with fixed financial incomes, with appropriate monitoring of compliance, enabling popular participation in the formulation of public policy and thus bringing a sense of empowerment to communities benefiting from payments can be an effective tool not only in protecting the environment, but also in reducing poverty and social inequalities.