ESA Working Paper No. 06-04


When are Payments for Environmental
Services Beneficial to the Poor?

David Zilberman, Leslie Lipper and Nancy McCarthy




PDF (210 KB)

Agricultural and Development Economics Division
The Food and Agriculture Organization
of the United Nations



The impact of payment for environmental services (PES) on poverty varies. Generally, PES is good for landowners and may negatively affect consumers if food demand is inelastic. Impacts also depend on the correlation between poverty and environmental amenities. If the richer farmers also provide the best environmental services (ES), then the poor farmers may lose. If there is negative correlation between ES and productivity, then the poorer landowners may gain from ES. The distribution of land matters. If smallholders depend on earnings from work on larger farms, then PES may affect them negatively. Program specifications also matter. Working land programs may have better distributional effects then PES for land diversion.


© FAO 2006