In the search for successful community-based conservation models there has been a substantial focus on payment for ecosystem services. Such payments are measurable inputs that are often associated with conservation success. A closer look suggests a more complex, historically and culturally contingent picture. We argue that a focus on payment for ecosystem services as a defining factor for success in community conservation risks overlooking other, more significant processes. In particular, we argue for the importance of (1) tenure and livelihood security and (2) relations of trust, communication and respect. We draw on case studies from East Africa, but the findings are relevant for global community-based conservation endeavours.

Andean grasslands (páramos) are highly valued for their role in regional water supply as well as for their biodiversity and large soil carbon stocks. Several Payment for Ecosystem Services (PES) programmes promote either afforestation or alteration of traditional burning regimes under the assumption that these land management strategies will maximize páramo ecosystem services, including carbon storage. However, knowledge of the effects of incentivized land uses is limited. In an evaluation of how afforestation and elimination of burning affect carbon storage at a site in southern Ecuador, we found the highest above-ground biomass carbon levels at afforested sites (99.3–122.0 t C ha−1), while grassland sites reached 23.9 t C ha−1 after 45 years of burn exclusion. Soil carbon storage from 0–20 cm was high across all sites (172.8–201.9 t C ha−1), but was significantly lower with afforestation than with burn exclusion. These findings suggest that, although afforestation is generally favoured when carbon is the primary ecosystem service of interest, grasslands with infrequent burning have important potential as a land management strategy when both above-ground biomass and soil carbon are considered. These results are relevant to the development and adaptation of PES programmes focused on carbon as well as those focused on multiple ecosystem services.

Sustaining the regular flow of water from mountain forests is important for downstream stakeholders in seasonally dry tropical countries, and a watershed payment for ecosystem services (PES) scheme that links rural ecosystem service providers to urban water users through economic transfers may help to maintain water supply and forest habitat. A CARE/WWF project in the Uluguru Mountains of Tanzania has established a pilot watershed PES scheme. We trace the development of this scheme and outline its initial impacts. Memoranda of Understanding between companies in Dar es Salaam (the downstream water users) and farmers in the mountains provide the framework to deliver tangible financial benefits to local people, help change patterns of land use and potentially improve water quality. A number of lessons learned from this project are relevant for similar schemes elsewhere in the region. Overcoming the various challenges is essential for expanding the current pilot project to a scale where it delivers measurable changes in water quality for downstream users.

Payments for ecosystem services (PES) are emerging worldwide as important mechanisms to align investments in human and natural well-being. PES projects are often defined as voluntary transactions where well-defined environmental/ecosystem services (or land uses likely to secure those services) are bought by a minimum of one service buyer, from a minimum of one service provider, if and only if the service provider continuously secures service provision (conditionality). Further criteria of PES include limiting additional objectives and ensuring that payments reward behaviour that would otherwise not occur (additionality). Together these best practices for PES are increasingly accepted as the most efficient means to achieve desired outcomes and are guiding funding for PES projects. We used a series of water funds (watershed-oriented PES projects based on a trust fund model) to examine how theoretical best practices could inform and improve practice and also how theory could learn from practical efforts. We conclude that thoughtful consideration is required when evaluating the promise of a PES approach against a theoretical ideal. We found that requiring conditionality may limit the use of creative finance mechanisms such as trust funds that can provide long-term benefits for conservation and human well-being, and that requiring additionality can exclude benefits from social diffusion and result in the inefficient targeting of PES funds. Finally, public–private partnerships in water funds lead to multiple additional/side objectives but partnerships are likely to lower transaction costs and provide transparent, long-term landscape-scale watershed management.

Ecosystem services programmes have been advocated for their potential to join conservation and poverty alleviation efforts, integrate working landscapes, and provide a flow of ecosystem services upon which populations rely. Ecuadorian páramo grasslands have rapidly become the focus of compensation for ecosystem services (CES) programmes intended to conserve hydrologic services, carbon sequestration and biodiversity. This paper reviews CES programmes in Ecuadorian páramos using a combination of semi-structured interviews with project personnel, policy makers and community leaders involved in CES programme development, document analysis, and archival research. Findings indicate that, in some cases, CES schemes can support local development, with potential to contribute to poverty alleviation; however, measures of programme effects on poverty were lacking. The programmes fell across the spectrum of activity-reducing to activity-enhancing, with some functioning as protected areas and others integrating working landscapes; however, designation of land as protected did not necessarily imply more restrictive use. Finally, these cases all reflect scenarios in which limited information is available linking land use with ecosystem services production and underscore the idea that adequate understanding of ecosystem production functions continues to be a barrier to development of effective programmes, particularly where the provision of multiple ecosystem services is anticipated.

The operation and longevity of hydropower dams are often negatively impacted by sedimentation. Forest conservation can reduce soil erosion, and therefore efforts to maintain upstream forest cover within a watershed contribute to the economic life span of a hydropower facility. The cost of forest conservation can be viewed as an investment in hydropower and be financed via a payment for ecosystem services (PES) scheme. A novel modelling framework is used to estimate payments for forest conservation consisting of: (1) land-use change projection; (2) watershed erosion modelling; (3) reservoir sedimentation estimation; (4) power generation loss calculation; and (5) PES scheme design. The framework was applied to a proposed dam in Cambodia (Pursat 1). The estimated net present value of forest conservation was US$ 4.7 million when using average annual climate values over 100 years, or US$ 6.4 million when considering droughts every eight years. This can be remunerated with annual payments of US$ 4.26 ha−1 or US$ 5.78 ha−1, respectively, covering forest protection costs estimated at US$ 0.9 ha−1 yr−1. The application of this type of PES represents a rational option that allows for conservation and development of hydropower watersheds susceptible to erosion and sedimentation.