Payments for Ecosystem Services: An Introduction and Case Study on Lao PDR

Humans are dependent on resources and processes provided by ecosystems, known as ecosystem services (e.g., food, clean water, disease control, climate regulation). Yet populations are placing increasing demands on critical ecosystems, often leading to their degradation and loss. This unsustainable use can be partly attributed to the fact that ecosystem services are not fully captured in commercial markets and are thus undervalued. Payments for Ecosystem Services (PES) are a suite of mechanisms designed to determine the value of ecosystem services and promote their conservation in the marketplace. Through incentives for land management, restoration, conservation, and sustainable use activities, PES schemes, when well adapted to the local context, can promote both sustainable ecosystem management and development. This module provides detailed background information on ecosystem services and PES, complemented by a case study narrative of the relevance of PES to National Protected Areas (NPAs) in Lao PDR, a country highly dependent on ecosystem services, both for subsistence and for income.