Payments for environmental services and ecological compensation: what are we talking about?


In October 2018 the Senate examined a draft résolution for the creation of payments for environmental services (“PES”) performed by farmers.

This is about permanently remunerating practices that give environmental and climate added value, going far beyond the agri-environmental and climate measures that already exist and the amounts of which are calculated to cover the additional costs of such practices.  The PES are at the heart of the discussions about the new European Common Agricultural Policy.

Confusion between PES and ecological compensation

Biotope regularly has the opportunity to examine the PES in the context of its work on financing the conservation of biodiversity.  We have thus noticed confusion between ecological compensation and the PES, which are used interchangeably to describe the economic incentives aimed at conserving or restoring biodiversity and the services that humans derive from these.

That amalgamation could be detrimental if it were to call into question certain of the key principles of ecological compensation (equivalence, additionality, continuity, etc.). In the context of scientific partnerships with the INRA, AgroParisTech and the CGIAR, we have therefore published our thoughts on this subject in the review Ecological Economics.

Drawing a clear distinction between PES and ecological compensation

In our first article (Biodiversity offsets and payments for environmental services: Clarifying the family ties), we reiterate that the objectives and founding principles of the PES and of compensation are different.  We show that their modus operandi is only similar in certain institutional contexts and very special circumstances. We also offer a  new definition of ecological compensation which distinguishes it more clearly from the PES and we use practical examples to illustrate its scope. 

The two tools require to be applied in a context that is appropriate in terms of rights, responsibility, and control of their implementation and their effectiveness.

In the event of failure, however, the consequences for compensation are more serious, as it is associated with biodiversity losses, whereas that is not the case for a PES.  While the feedback on the PES experience can be very useful for the design and the implementation of ecological compensation, it must also be considered as a focus for the specific requirements of the compensation in order not to take any risks in the event of failure.  In effect, if a PES fails, it is sufficient to stop the payment for the status quo to be maintained, but if an ecological compensation fails, the biodiversity losses that were authorised remain.

In a second article (Challenges of achieving biodiversity offset outcomes through agri-environmental schemes: evidence from an empirical study in Southern France), we present in detail one of the first cases of use of the contracts with farmers to implement compensation for a huge infrastructure project: the Nîmes and Montpellier rail bypass.

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