ABSTRACT
In distinguishing between providers and beneficiaries of ecosystem services (ES), one of the key contributions of the ES framework has been the acknowledgement that the benefits of ecosystems go beyond their physical boundaries. Providers of ES are normally the stewards of the resource base. Beneficiaries are agents whose economic performance or livelihoods are affected by those services (which often are appropriated ‘free of charge’). Providers and beneficiaries normally belong to different social groups, but their welfares are interconnected through ES, the provision of which depends on decisions taken by multiple agents. The possibilities of coordination between these two groups (to align their interests) are very much conditioned by the allocation of rights and the types of ES (how they are produced, provided and consumed). Marine and coastal resources may be mobile (e.g., fish) or not (e.g., mangroves).
However, they share a series of characteristics: (a) they are often governed by regimes based on community or public property rights; (b) they often also share high subtractability of use, in other words, appropriation by some users diminishes the availability of the resource and its potential provision of services for others; and (c) it can be difficult to exclude users, either because they are mobile (ships, etc.) or because of the property rights regimes (difficulties in controlling access, such as in the case of seagrass communities, coral reefs, fish stocks, etc.). In addition, the environmental services provided by these resources share key features: (a) high mobility or broad geographical scale; (b) high difficulty in excluding beneficiaries; and (c) high complexity and uncertainty about the factors conditioning provision. The latter is mainly due to the multiplicity of relations between the elements of the ecosystem, the water-land interface and the difficulties in drawing the boundaries of such systems. For example, coastal ecosystems play an important role in (i) coastal protection
by means of dissipating waves or buffering wind, (ii) erosion control through sediment stabilization and soil retention or (iii) flood protection through water flow regulation and control (Rönnbäck et al., 2007; Barbier, 2012). Furthermore, ecosystems such as mangroves or coastal wetlands can be key sources of nutrients (Hussain and Badola, 2008) or nursery grounds for fish and shellfish (Hussain
and Badola, 2010), benefiting a wide range of economic agents. All these services share a public character (difficulties in excluding beneficiaries) but also a high subtractability between the use of the coastal resource and the provision of services. A hectare of mangrove that is converted to a shrimp farm, for instance, will affect not only the direct users of the mangrove forest but also the wide range of beneficiaries (often in distant locations) of the services rendered by it (Tuan Vo et al., 2012). Hence, many marine and coastal resources and their services can be considered common-pool goods, which may be understood as goods that combine a high difficulty in excluding beneficiaries and high subtractability (Ostrom, 2010a). These types of goods are prone to suffer social dilemmas (where the pursuit of individual interests in the short run leads to socially sub-optimal situations). The chances of social dilemmas are exacerbated in marine ecosystems (such as fish stocks, coral reefs, mangroves, estuarine vegetation, etc.) because they are prone to suffer open access situations, especially when they are not properly governed. Control is particularly difficult in water resources, since watercourses are often public (e.g., anybody is entitled to travel by sea or river). In comparison with private goods, public or common-pool goods have difficulties
in being governed by market structures. Many ecosystem services fall within these latter categories (Farley, 2012), not only those provided within a marine or coastal environment. Establishingmarkets or evenpayment schemes for such servicesmay be extremely challenging and costly (especially due to high transaction costs). For instance, the fact that potential beneficiaries of many marine ecosystem services are hardly excludable makes it very difficult both to identify who should pay for such services, and to enforce the payment. Also, if the concerned resource base is highly mobile or it is under a regime of de jure public property right, it is very hard to identify the ‘providers’ of ecosystem services. Users of mangroves, for example, can be very diverse and dispersed, making it challenging to determine who should receive payment or compensation, particularly in situations where de facto access entitlements are exerted by many agents. Due to the above-mentioned characteristics, we can also expect that governance regimes controlled by a single authority or decision centre will tend to be ineffective in the management of marine ecosystem services, especially in developing countries, where enforcement capacity is low – the main reason being that, in a situation of high excludability, control costs are by definition very high, and need a very well-developed organizational setting for the enforcement of rules. In addition, the geographical scope of marine ecosystem services normally crosses political and administrative boundaries, and the stakeholders involved are usually very diverse in terms of level of organization, wealth and political influence, among other features. Hierarchical governance structures tend to have serious difficulties in dealing with such multiple layers of decision making and diversity of interests and motivations. In summary, both markets and hierarchies tend to face important constraints in dealing with the challenges of managing marine and coastal ecosystem services. Given this backdrop, there are two concepts that have a high heuristic
and practical power in the management of marine and coastal ecosystem services: polycentric governance and collective action. Polycentricity refers to a
‘social system of many decision centres having limited autonomy and autonomous prerogatives’ (Aligica and Tarko, 2012). Collective action problems occur when individuals are embedded in an interdependent situation, where the maximization of individual interests in the short run generates lower joint outcomes than could potentially have been achieved (Ostrom, 2010b). Both concepts were prominent in the seminal work of Elinor Ostrom. Due to the reasons explained above, the management of marine and coastal ecosystem services can be considered a ‘problem of the commons’, requiring collective action for its resolution. There is, however, one important difference with regard to the management systems for natural resources usually studied by the literature on the commons. Typically, beneficiaries of ecosystem services and users of the resource base (providing such services) belong to different social groups, while in most of the cases of common-pool natural resources reported in the literature (fisheries, forest resources, irrigation systems, etc.) the users or appropriators of the resource (fishers, forest dwellers, users of water systems, etc.) are also the main beneficiaries. Compared with these systems, the concept of ES adds, then, the need to consider coordination between different social groups, which often belong to different decision centres (polycentricity). Hence, the management of ES can be also considered an example of a ‘coordination problem’, defined as a situation where the achievement of social goals requires the alignment of activities along social groups and individuals with different interests, across various scales. The need for coordination arises from the existence of interdependent performances. Most problems in the management of ecosystem services arise when coordination between the parties involved is not sufficiently effective, leading to social problems (e.g., misallocation or undersupply of ES). As we will see below, there are many possible mechanisms (or governance modes) to solve coordination problems between beneficiaries and users of the resource base, and market arrangements are just one of them. In this chapter I discuss theoretical insights about the appropriateness of pay-
ments for ecosystem services to improve the management of marine ecosystems, drawing on concepts and evidence from the literature on institutional and behavioural economics. The main objectives are to provide a theoretical background and practical guidelines to policymakers and practitioners aiming to set up payments for the enhancement of marine ES. The issues elaborated here are, however, useful for any situation involving the creation of incentives for the management of ES. The next section discusses payments for ecosystem services (PES) as part of a new paradigm shift in environmental governance, and describes the characteristics of such a paradigm. The third section explains why the use of PES has spread so quickly, particularly in developing countries. Using insights from transaction cost economics, the fourth section calls for a reconceptualization of PES as incentives for collective action (instead of Coasean transactions to solve environmental externalities). The fifth section summarizes the main findings of the literature on behavioural economics and social psychology concerning the nature of economic incentives, while the sixth section discusses the practical implications of the proposed conceptual shift. The chapter ends with a concluding section, in which the main ideas are briefly summarized.
