When to Pay? Adjusting the Timing of Payments in PES Design to the Needs of Poor Land-users

• Published in: Ecological economics 2017-08, Vol.138, p.168-177
• Main Authors: Randrianarison, Henintsoa, Ramiaramanana, Jeannot, Wätzold, Frank
• Format: Article
• Language: English
• Subjects: Choice modelling; Madagascar; Payment timing; Payments for ecosystem services; Subsistence farming
• ISSN: 0921-8009; 1873-6106
• DOI: 10.1016/j.ecolecon.2017.03.040

A neglected issue in the design of payments for ecosystem services (PES) is the timing of payments to ecosystem service providers over the course of the year. We hypothesise that timing should matter to poor land-users with limited options to save money in regions dominated by subsistence farming, seasonal fluctuations of food supply, and peaks in expenses during the year due to cultural events such as circumcisions and funeral ceremonies that occur in specific months. If land-users value payments differently at different time points throughout the year, the provision of ecosystem services can be increased for the given financial resources if payments are made at a point in time when land-users need those most. We conducted a choice experiment in the Mahafaly plateau in Southwestern Madagascar, an area which meets the aforementioned criteria, to test the importance of the time of receipt of payments. We found that respondents are willing to accept less money if they receive it in months of food shortage unlike if they receive it at the time of cultural events. We conclude that the cost-effectiveness of PES in regions with the above-mentioned characteristics can be increased by selecting the appropriate timing to pay ecosystem service providers.