Food and Agriculture Organization of the United Nations- FAO
Payments for Environmental Services (PES) from Agricultural Landscapes
Financial sustainability
Sources of funds
Apart from pooling contributions from direct users of complementary environmental services, there are other sources of funding that a PES scheme can tap, such as Government revenues from related sectors: in Costa Rica for example, the national PES scheme that pays mainly for forest conservation is funded by a share of the fuel tax, or there might be grants from international institutions or donations from the international community. Like in a sponsoring scheme commonly used to protect flagship species, the same scheme in Costa Rica also gets contributions from business, NGOs and individuals from around the world by offering certificates of investment in environmental services for a flat rate per hectare.
Donor funding can play a very important role. At the initial stages this could be by supporting the update of legal framework and strengthening general institutional capacity for PES programme design, or by implementing and monitoring the scheme. In the long run, donor funding might be required to cover biodiversity values in which the private sector is not interested or public funds can’t reach (e.g. in national PES programmes where donor agencies like GEF earmark funds contributed to biodiversity priority). The same applies to PES schemes with a very strong commitment to support poverty alleviation. In these cases, donor funds could be crucial in supporting poverty-specific characteristics of the scheme, and leave the contributions for the environmental services to be fully invested in priority areas to deliver the environmental goals they have been paid for.
