What is the composition and size of the global market for payments for ecosystem services (PES)?

In an effort to answer this question, PROFOR supported an endeavor to devise a matrix which maps the size, environmental and community impacts, participants and shapers, and market trends for PES in the forestry and other sectors. 

MAIN FINDINGS

The findings are broad in scope and complex. A few examples of trends uncovered during this process are:

• While most PES markets are growing at approximately 10 to 20 percent a year, the carbon markets are skyrocketing at 200 to 700 percent a year. The Voluntary Carbon market, where the lion’s share of the land use and land use change and forestry project take place, is growing at a faster rate than the regulated carbon market.
• The participants and experts surveyed believe existing markets have the potential to address in a significant way the global environmental issues of biodiversity loss, water pollution and climate change – but may not be living up to their potential. One major stumbling block continues to be transparent information and capacity.
• To achieve the sustainable management of ecosystem services, PES schemes must be designed and implemented carefully, intelligently, and adaptively.
• An important aspect across all of these markets will be to ensure that the communities and small scale producers are able to actively participate and benefit from ecosystem service markets. This will mean developing instruments to provide support, such as aggregation services to communities, shaping regulation to engage local small-scale providers, and clarifying tenure and user rights associated with these new opportunities.