PROSPER Assessment: Payment for Environmental Services

Payment for environmental services (PES) represent a range of approaches where beneficiaries of environmental goods and services compensate or reward resource managers, conditional on the continued provision of the goods and services (Wunder 2005, Sommerville et al. 2009).

Within PES, service providers are paid by a service buyer for land uses that result in a measurable environmental service, such as biodiversity, water quality and/or quantity, carbon sequestration or landscape value. PES relies on the “carrot” of a positive incentive, but also the “stick” of conditionality. Accordingly, a PES is not based on simply transferring payments to service providers, but requires direct links between positive incentives and the service or action provided by individuals, companies or community groups. Critical to this arrangement is the understanding that if the service or action is not provided to the service buyers, positive incentives will stop flowing. This means that the bundle of incentives proposed under a PES (and including existing incentives, legislation and policy) must be greater than the alternative of business as usual.

Monetary transfers are not the only incentive introduced through a PES, and the bundle of incentives in a PES will invariably include education and increasing awareness on relevant laws and performance, as well as monitoring and enforcement. In some cases the monitoring introduced by PES for the purpose of making payments creates the impression of third party monitoring for legal enforcement, thereby motivating behavior change. Yet within this framework, the positive incentives should outweigh the negative for a PES to maintain the principle of providing positive incentives.


This description is more complicated in community based systems where a subset of a population may engage in a PES through a community institution, based on their belief that they can influence the behaviors of the wider population. These sub-groups may in fact use social pressure and local enforcement rather than voluntary participation through positive incentives. Furthermore, in practice, many donors and development professionals are hesitant to engage fully in a conditional incentive, as it places risk on vulnerable populations in the event of non-compliance. Thus, many of the emergent “PES-like” interventions possess elements of a PES by trying to link incentives to performance, but lack the key motivational component of true conditionality.


Just because PES aims to transfer incentives to the local level does not mean that it is pro-poor. Indeed, the poor often have less secure tenure, fewer rights to manage resources, less negotiating power and control less land than their more wealthy counterparts both nationally and at the local level. As a result, PES in general and particularly community-based PES has a tendency to overlook poor and vulnerable populations, unless there is an explicit effort to engage these groups. Pro-poor PES can result in less efficient service provision than would otherwise occur with a given amount of funds due to increased transaction costs of working with numerous smallholders, particularly if the PES aims to contribute to resolving some of the issues that presently limit the participation of poor and vulnerable populations. Propoor PES is possible, but it should be recognized that it is often more costly to implement and may result in less efficient service provision than is otherwise possible. With this in mind, the development of a community-based PES scheme must consider the PES implications for all segments of the community so as to truly comprehend whether a pro-poor PES scheme is viable and can provide appropriate “carrots and sticks” while addressing the needs of the most vulnerable members of the community.


The legal framework in Liberia provides for commercial, conservation and community (the 3 C’s) approaches to forest management. The PROSPER program is designed to build institutional capacity and support for community forestry through, inter alia, the development of community forestry models in Liberia that integrate the 3Cs so as to provide a diverse range of viable models for community forestry that reflect the complexity and diversity of Liberia’s forests and communities. Under USAID/Liberia’s Land Rights and Community Forestry Program (LRCFP), community forestry models adjacent to and within protected areas were the main focus of program efforts. These pilots provide the starting point for community forestry models under PROSPER, but will be expanded and adapted under PROSPER to take into consideration different forest types, different management objectives, and diverse communities.

Specifically, the new PROSPER sites differ from the LRCFP sites in the following ways:

  • None of the new sites is located in or adjacent to protected areas;
  • One of the new sites includes a mangrove forest (Barcoline Community in Grand Bassa);
  • Four of the new sites comprise the Big Gio State Forest that is classified as a commercial forest and is an unallocated Forest Management Concession (Sehzuplay, Gblor, Yourpea, and Quilla sites in Nimba County); and
  • Two of the sites are located in close proximity to active forest concessions (Gblor in Nimba County and the Kpogblen site in Grand Bassa.

While the governance structures for each of these community forests will adhere to the requirements of the Community Rights Law (CRL) – the legal basis for community forestry – management plans and objectives will differ greatly across sites.


As part of the site selection process, the PROSPER program examined the potential for PES to provide long-term sustainable financing for community forestry. In a country with scarce resources and limited technical capacity, communities may benefit from a PES scheme by not only receiving economic incentives for sustainable management, but PES may also provide resources for forest management monitoring and evaluation that might not otherwise be taking place because of the limited capacity of the Forestry Development Authority (FDA) – the agency with the mandate to manage the nation’s forests. That said, the PROSPER program is not in a position to finance a PES mechanism. PROSPER’s role could be one of facilitator (bring together service providers and beneficiaries) and providing training to communities and institutions to ensure that the capacity to provide environmental services is adequate to address the needs of beneficiaries.