How to achieve fairness in payments for ecosystem services? Insights from agrobiodiversity conservation auctions

• Fairness in PES can take multiple dimensions.
• The choice of payment rule determines outcomes under fixed conservation budgets.
• Conservation and distributional outcomes can vary largely between study sites.
• Cost-effectiveness does not necessarily need to be traded-off against fairness.
• Given competing fairness considerations, designing fair PES is very challenging.

This paper provides insights into the multiple dimensions of fairness in payments for ecosystem services (PES) using the results of pilot agrobiodiversity conservation auctions. In two sites in the Bolivian and Peruvian Andes farming groups bid for payments for the conservation of traditional crop varieties. We assess different payment rules relating to how to allocate payments among groups subject to a fixed conservation budget. The discriminatory, uniform and conditional payment rules tested in these case studies incorporate alternative principles of fairness, while resulting in varying conservation and distributional outcomes. The latter are measured in terms of the distributional equality of payments among farmers and groups, and the distributional effects of payments on different types of groups. Findings indicate that conservation and distributional outcomes are highly sensitive to the payment rule chosen and vary across study sites. There may be contexts where cost-effectiveness does not need to be traded-off against fairness. Yet given the number of competing fairness considerations, achieving PES outcomes that are perceived as fair is very challenging.