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Multiple-Purchaser Payments for Ecosystem Services: An Exploration Using Spatial Simulation Modelling

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  • Gregory Smith

    (University of Exeter Business School)

  • Brett Day

    (University of Exeter Business School)

  • Amy Binner

    (University of Exeter Business School)

Abstract

This paper focuses on the issue of payments for ecosystem services (PES) mechanism design when the activity incentivised through the scheme benefits multiple groups, each of whom might be prepared to contribute to payments made through the scheme. In particular, we examine spatial coordination on the demand side of the market; that is to say, the question of which beneficiary of the PES scheme buys land-management changes on which land parcels. We show through spatial simulation modelling that it is possible for negotiation to lead to Pareto improvements when compared to solutions reached through non-cooperative strategic solutions; however, we also show that this result is not universal and only holds under certain conditions. In particular, the spatial correlation and spatial interdependence of the ecosystem service benefits are key in determining whether negotiation between beneficiaries is optimal and therefore if policy makers and designers of PES schemes should be prioritising bringing together multiple beneficiaries of ecosystem services.

Suggested Citation

  • Gregory Smith & Brett Day & Amy Binner, 2019. "Multiple-Purchaser Payments for Ecosystem Services: An Exploration Using Spatial Simulation Modelling," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 421-447, September.
    • Handle: RePEc:kap:enreec:v:74:y:2019:i:1:d:10.1007_s10640-019-00324-z
    DOI: 10.1007/s10640-019-00324-z
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    Cited by:

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    2. Pollyana Ferreira da Silva & Gina Rizpah Besen & Helena Ribeiro, 2022. "Payment for Environmental Services for Waste Pickers: Systematic Literature Mapping," Energy and Environment Research, Canadian Center of Science and Education, vol. 11(2), pages 1-54, December.
    3. Yan, Haiming & Yang, Huicai & Guo, Xiaonan & Zhao, Shuqin & Jiang, Qun'ou, 2022. "Payments for ecosystem services as an essential approach to improving ecosystem services: A review," Ecological Economics, Elsevier, vol. 201(C).
    4. Haiming Yan & Wei Li & Huicai Yang & Xiaonan Guo & Xingran Liu & Wenru Jia, 2021. "Estimation of the Rational Range of Ecological Compensation to Address Land Degradation in the Poverty Belt around Beijing and Tianjin, China," Land, MDPI, vol. 10(12), pages 1-12, December.
    5. Alain-Désiré Nimubona & Ahmet Ozkardas & Jean-Christophe Pereau, 2023. "Negotiations over the Provision of Multiple Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(2), pages 475-506, February.

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