Payments for ecosystem services : opportunities and challenges in the Brazilian Amazon

Brazil has committed to reducing deforestation in the Amazon and has identified target goals for 2020. A variety of environmental policies and tools are used to reduce deforestation in the region, including payments for ecosystems services (PES). This report analyzes whether payments for ecosystem services are a viable option for supporting conservation and socio-economic goals in the Amazon. PES schemes provide economic incentives in exchange for meeting an environmental goal. They have been relatively successful in developed countries but have had limited applications or success in developing contexts. This report identifies the agents and activities that drive deforestation in the Brazilian Amazon and determines which of these may be suitable for PES applications. It also provides a framework for analyzing current PES schemes in order to draw out best practices and lessons learned which may be applied to future program. PES schemes do have a role to play as one of the tools used in addressing deforestation in the Amazon. They can be cheaper than indirect approaches but do face some challenges in evaluation. Future PES applications may benefit from the lessons learned in the early applications of these programs.