Transformative change through Payments for Ecosystem Services (PES): A conceptual framework and application to conservation agriculture in Malawi

Non-Technical summary A major challenge in addressing the loss of benefits and services provided by the natural environment is that it can be difficult to find ways for those who benefit from them to pay for their preservation. We examine one such context in Malawi, where erosion from soils disturbed by agriculture affects not only farmers' incomes, but also damages aquatic habitat and inhibits the storage and hydropower potential of dams downstream. We demonstrate that payments from hydropower producers to farmers to maintain land cover and prevent erosion can have benefits for all parties involved Technical summary Payments for ecosystem services (PES) schemes provide a mechanism to connect beneficiaries of ecosystem services with those whose actions could provide them. Recent work on PES has demonstrated a priority on matching costs and benefits at the margin, where, on the whole, payments are also low. We draw on dynamic systems theory to demonstrate that reinforcing feedbacks that benefit ecosystem services producers may warrant much higher initial investments in PES programs, and provide evidence of behavioural drivers from a PES trial in Malawi to support these claims. Specifically, in our study, peer effects and improvement to soil structure are processes that can encourage adoption of sustainable land management practices, alongside or in the absence of other incentives. Under this framing, PES programs can be vehicles to shift systems between basins of attraction over a time-limited period, rather than programs necessary for long-Term maintenance of services.