Can conservation contracts co-exist with change? Payment for ecosystem services in the context of adaptive decision-making and sustainability.

This paper considers the ability of payment for ecosystem services (PES) programs to operate in the context of dynamic and complex social-ecological systems. Drawing on the experiences of two different PES programs in Latin America, we examine how PES institutions fit with the tenets of adaptive decision-making for sustainable resource management. We identify how the program goals and the connection to the market influence the incentive structure, information gathering, learning and feedback processes, and the structure of decision-making rights, specifically the ability to make and modify resource-use rules. Although limited in their generalizability, findings from the two case studies suggest a tension between the contractual model of PES and adaptive decision-making in natural resource systems. PES programs are not inherently decentralized, flexible management tools, as PES contracts tend to restrict decision-making rights and offer minimal flexibility mechanisms to change resource-use practices over the duration of the contract period. Furthermore, PES design and flexibility is heavily dependent on the goals and mission of the buyer and the respective market. If PES is to facilitate sustainable resource management, greater attention is needed to assess how the institutional design of the PES contracts influence the motivation and capacity of participants and program officers alike to adaptively manage the respective resource systems.