Evaluating Payments for Environmental Services: Methodological Challenges

Over the last fifteen years, Payments for Environmental Services (PES) schemes have become very popular environmental policy instruments, but the academic literature has begun to question their additionality. The literature attempts to estimate the causal effect of these programs by applying impact evaluation (IE) techniques. However, PES programs are complex instruments and IE methods cannot be directly applied without adjustments. Based on a systematic review of the literature, this article proposes a framework for the methodological process of designing an IE for PES schemes. It revises and discusses the methodological choices at each step of the process and proposes guidelines for practitioners.