Dialogue on ecosystem services, payments and outcome based approaches

The document examines Payments for Ecosystem Services (PES) as a tool to incentivize agricultural land managers to provide non-market environmental benefits. It distinguishes between action-based payments, which reward the adoption of specific practices, and outcome-based payments, which reward actual environmental results. The authors argue that outcome-based approaches are more effective at delivering biodiversity and ecosystem services because they encourage farmer innovation and target the most ecologically valuable land. While European examples often focus on site-specific biodiversity in grasslands, the report suggests that shifting from top-down contractual agreements to local governance and participatory design is essential for scaling these mechanisms. Barriers to implementation include scientific uncertainty, high administrative costs, and the risk of 'leakage' where environmental damage is displaced outside the PES zone.

• Outcome-based PES are considered more effective than action-based approaches because they allow farmers to use context-specific knowledge to innovate, improve environmental targeting, and treat environmental objectives as 'non-commodity outputs'.
• Action-based payments have seen high uptake—with 22% of the EU-27's utilised agricultural area under agri-environment agreements as of 2009—but critics argue they fail to meet the full potential for environmental benefits because paying for practices does not guarantee desired outcomes.
• European outcome-based PES primarily target biodiversity conservation in grassland habitats and specific animal species, such as large carnivores in Sweden and breeding waders in the Netherlands.
• The use of auctions to determine payment levels can improve the cost-effectiveness and efficiency of PES by accounting for the varying compliance costs of different participants.
• Implementation of PES faces several barriers, including a lack of awareness among buyers and providers, scientific uncertainty regarding ecological processes, and the risk of 'leakage', where damaging activities are simply displaced to areas outside the PES zone.
• To maximize the delivery of ecosystem services, policy should shift from top-down, individual contractual agreements toward integrating local governance and supporting the self-governance of land manager groups.

APA

Osbeck, M., Schwarz, G., & Morkvenas, Z. (2013). Dialogue on ecosystem services, payments and outcome based approaches. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Air-land-water-resources/BC-2013-PES-Background-Brief.pdf

Chicago

Osbeck, Maria, Gerald Schwarz, and Zymantas Morkvenas. Dialogue on ecosystem services, payments and outcome based approaches. Stockholm Environment Institute, 2013. https://www.sei.org/mediamanager/documents/Publications/Air-land-water-resources/BC-2013-PES-Background-Brief.pdf.

Wikipedia

{{cite report |last1=Osbeck |first1=Maria |last2=Schwarz |first2=Gerald |last3=Morkvenas |first3=Zymantas |title=Dialogue on ecosystem services, payments and outcome based approaches |publisher=Stockholm Environment Institute |date=March 2013 |url=https://www.sei.org/mediamanager/documents/Publications/Air-land-water-resources/BC-2013-PES-Background-Brief.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{osbeck2013dialogue, author = {Osbeck, Maria and Schwarz, Gerald and Morkvenas, Zymantas}, title = {{Dialogue on ecosystem services, payments and outcome based approaches}}, institution = {Stockholm Environment Institute}, year = {2013}, month = mar, url = {https://www.sei.org/mediamanager/documents/Publications/Air-land-water-resources/BC-2013-PES-Background-Brief.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }