DOI: 10.36347/sjahss.2018.v06i01.037

Pages: 231-241

Protection and conservation of resources requires practicing of environmentally benign practices and involves costs to practitioners. People incurring these expenditures expect to be compensated or rewarded, as an incentive, for their involvement. However, majority of existing environmental protection and conservation schemes do not contain rewards for service providers. Inadequacy of market to bring various environmental services in to the market fold leads to markets failure. Market failure occurs because many environmental services provided fall into the category of externalities or public goods. Markets typically fail to compensate those who produce positive externalities due to the absence of property rights and other legal means or perhaps because the service provision is not recognized by the beneficiaries or may be even by the providers themselves. The aspect of reward for environmental services gave way for development of market-based instruments for ecosystems services though in a limited way. These schemes have been called by different names such as payment of ecosystems services (PES), compensation for ecosystems services (CES). Market based instruments provide an opportunity to compensate environmental service providers who adopt conservation measures, collecting compensation from service users or beneficiaries of such environmental services. This paper attempts to illustrate how PES schemes would be effective under conditions of poverty in Asia. This study is based on review of literature related to PES.