Bundling multiple benefits: A necessary framework for sustaining ecosystem services

Background/Question/Methods

The stacking or bundling of payments for individual ecosystem services has been proposed as one way to improve incentives for the restoration and conservation of intact ecosystems that provide valuable ecosystem services.  Payments for watershed services (PWS) are being widely adopted, particularly in the developing world, to enhance hydrological services that are critical for the provision of clean drinking water for people and to support water for agriculture and fisheries that is critical for food security. However, there is currently little information on how stacking or bundling payments would affect environmental outcomes of PWS schemes, or the practical implications in terms of social impacts, gender equity, or market or incentives efficiencies.  If stacking or bundling of payments (or some combination of the two mechanisms) is to be a practical tool for enhancing the effectiveness of PWS approaches for conserving watersheds and ensuring supplies of fresh water, then PWS programs will need information on the advantages and disadvantages of stacking and of  bundling, the scientific and technical issues, an understanding of the risks, and decision frameworks, practical tools, and methodologies to enable and facilitate the use of stacking and/or bundling.

We used a combination of stakeholder interviews, meta-analysis of 23 case studies, and literature review to determine if stacking or bundling can enhance the effectiveness of PWS as an approach for conservation, and if so, what kinds of guidance and technical resources will PWS programs need to implement stacking or bundling? 

Results/Conclusions

Stacking or bundling of ecosystem services is rarely incorporated into either targeting payments or differentiating payments in PWS schemes, but analysis of case studies shows that environmental outcomes and social co-benefits such as poverty reduction would be enhanced by stacking and most effectively by bundling payments.  Compared to single service schemes, explicit stacking or bundling also increases the likelihood that payments will be targeted more strategically within the landscape to enhance environmental benefits, trade-offs or synergies among individual ecosystem services can be transparently addressed, and conditionality of environmental outcomes more adequately documented.