How land property rights affect the effectiveness of payment for ecosystem services: A review

Abstract

We conducted a qualitative literature review and provided a theoretical discussion of how private, common, and public land property rights (LPRs) uniquely influence the effectiveness of Payments for Ecosystem Service (PES). We considered three aspects of PES’s effectiveness: additionality (PES programs typically employ tests to assess whether the payment will result in additional ecosystem services), socioeconomic impacts, and transaction costs. The existing literature has not addressed differences between LPR types with respect to ensuring additionality. Particularly striking is the lack of consideration of additionality on public and common lands. Future research can assess whether private LPRs are more favorable for ensuing additionality than common and public LPRs. We found that most existing tests for additionality are for private lands, likely due to financial payment on private lands having more leverage to change land uses or technology in ways that can result in changes to ecosystem service provisions beyond baseline levels. While existing studies have shown more diverse socioeconomic impacts (e.g., on equity among community members) on common lands than on private and public lands, socioeconomic impacts between private and public lands have been insufficiently compared. Whether public LPR are associated with higher or lower transaction costs than private and common LPRs also remains unclear, although existing literature has indicated some strengths (e.g., reducing the number of PES contracts) and limitations (e.g., mistrust, contested leadership) of common lands for saving transaction costs compared to private lands. Quantitative literature reviews and more empirical evidence from real-world cases are needed to further assess the strengths and limitations of different types of LPR for enhancing PES’s effectiveness.