Governing a pioneer program on payment for watershed services: Stakeholder involvement, legal frameworks and early lessons from the Atlantic forest of Brazil

Increasing acceptance of payments for ecosystem services (PES) programs as environmental policy alternatives suggests a clear need for research on PES implementation, both to validate theoretical frameworks and improve approaches for existing and future programs. We provide a history of the 10-year old Conservador das Águas program in Extrema, a city in Minas Gerais located within the Atlantic Forest of Brazil. To date, the program has coordinated restoration activities that have increased native forest cover in 60% in targeted sub-watershed through contracts with 53 landowners, and has established long-term collaborations among government agencies, civil society, and landowners. Evaluation of the institutional elements of the program using an institutional framework reveals lessons that are relevant for future projects. We find that national legislation and local government organizations have played key roles in enabling and maintaining program activities. Further, strategic decisions by program staff, including targeting important regions and actors within the municipality, the use of Forest Code mandates as an incentive for participation, and use of municipal legislation to secure funding, were critical to the program's success. We use an institutional framework to provide a review of the program, including its legal context, actors, and financial instruments, for those engaged in establishing and sustaining similar programs.