Payments for ecosystem services (PES) are designed to reward those who maintain ecosystem quality (ecosystem service providers) through payments from those who benefit from the stream of services generated within that particular ecosystem (ecosystem service beneficiaries). Those responsible for providing ecosystem services usually have a title to use land and manage it in a way that maximizes the delivery of services demanded by the beneficiaries (e.g., representing upstream and downstream communities, respectively). The popularity of this approach has been growing with an increasing interest in market instruments for environmental conservation and with the growing adoption of the ecosystem services framework in environmental management.
Although PES are intended to solve environmental problems and at the same time alleviate poverty, they may actually aggravate the latter. We refer to such counterintuitive negative socio-economic consequences of PES as ecosystem service curse (Kronenberg and Hubacek 2013) and associate them principally with the problems of rent seeking, unequal bargaining power and volatility of payments, explained in the following three paragraphs.
Rent seeking may emerge when some actors take over payments (i.e., rents from ecosystem services), often by manipulation, corruption or force, from those who would have been entitled to receive those rents under normal circumstances. As PES are tied to land ownership, such problems may emerge when customary property rights are not strong enough to ensure that marginal local communities receive those payments or when these communities are driven off their land by powerful rent-seeking stakeholders. For example, such elite capture through the monopolization of access to forestland has been identified as one of key challenges to PES implementation in Vietnam. In particular, one case study—Ba Vi National Park—illustrates an extreme situation in which all payments were captured by local elites who used their connections to political power and thus monopolized access to land (To et al. 2012). Furthermore, when the indigenous communities are forced to move, they often encroach upon other usually more marginal areas, potentially moving them beyond a tipping point or otherwise contributing to their degradation.
Unequal bargaining power, i.e., the fact that ecosystem service beneficiaries have more experience with market mechanisms and negotiations, affects the conditions within which PES transactions are negotiated. Communities responsible for providing ecosystem services may have limited experience and understanding of such novel mechanisms, and few opportunities to seek competent and affordable legal advice. Some ecosystem service providers may even be excluded from the potential stream of benefits because of their inability to enter the relevant negotiations. Instead, payments may be directed to larger players who are easier to work with [indeed, for these reasons, the Costa Rican PES scheme has been critically assessed as an indirect state subsidy for large agribusiness (Lansing 2013)].
Volatility of payments may make it difficult to create viable long-term ecosystem management strategies. This volatility can be due to a number of factors beyond the control of the recipient. This can include changes to the respective ecosystems and their properties [often in response to external biophysical stressors, such as environmental degradation, forest fires, and sea level rise (Friess et al. 2015)], as well as changes in needs and preferences affecting how much people would be willing or are able to pay for ecosystem services. These translate into volatility of income for ecosystem service providers, which so far has been most evident in payments related to carbon sequestration due to price fluctuations in the international carbon market (Phelps et al. 2011).
Rent seeking, unequal bargaining power and volatility of economic circumstances contribute to the so-called poverty trap, i.e., the persistence of poverty, in spite of attempts to get out of it. Persistence of poverty is often explained by threshold effects (indicating that an individual, a group or even a country has to reach a certain level of wealth to be able to get out of poverty), dysfunctional institutions (that are not able to ensure proper means that would help people get out of poverty) and neighborhood effects (influences from one’s peers) (Bowles et al. 2006). Poverty traps can be linked to multiple barriers that prevent people from making their own choices and entering markets on equal terms (Sen 1993). Indeed, many attempts to provide environmentally sound development opportunities to poor communities in developing countries have not been able to break the poverty trap in which those communities are caught (Valkila 2009). We contend that the potential ecosystem service curse may represent yet another example of such problems and that these problems may gain additional relevance when PES schemes grow as predicted in the near future (Carroll and Jenkins 2008; Milder et al. 2010).
The ecosystem service curse hypothesis exceeds the socio-economic focus of most poverty trap discussions to cover social-ecological systems. Indeed, all of the above ecosystem service curse problems are related to the dynamics and complexity in social-ecological systems, and they ultimately depend on the quality of institutions that govern these systems. Institutions act as linkages between the social and the ecological, and require an understanding that these systems coevolve and mutually influence each other. Because of these linkages, sustainability science provides a useful lens to study the ecosystem service curse hypothesis, notably within the framework of social-ecological traps, as explained in the following sections.