Transitions in Payments for Ecosystem Services in Guatemala: Embedding Forestry Incentives into Rural Development Value Systems

Payments for Ecosystem Services (PES) programmes increasingly reflect multiple stakeholder demands and rarely operate in market form. In Guatemala, the earliest forestry incentives — a form of PES — benefited larger landowners and functioned as subsidies for both extractive forest production and ecosystem services. Smallholders and indigenous communal land managers in Guatemala campaigned for PES programmes to meet their needs, leading to the creation of a second programme that focuses on improving rural development, coupled with ecosystem services. This article examines how these historically marginalized groups have used PES as an opportunity to engage with the state and demand embedded development that more strongly reflects their values of forests and their desired relationship with the Guatemalan state. As a result of this activism, these Guatemalan forestry incentives reach smallholders more successfully than PES programmes in many other countries. However, more far‐reaching changes in land use are tempered by power imbalances and structural inequalities that are unaddressed and, in fact, reinforced by PES programmes, such as underfunding, narrow conceptions of land ownership, and unequal representation.