Impact of a regional payment for ecosystem service program on the livelihoods of different rural households

Payments for ecosystem services (PES) is popular despite little empirical evidence of their effectiveness in poverty alleviation. Using survey data on rural households' livelihoods in Changting County, Southeast China, we evaluate the comprehensive and dynamic livelihood impacts of PES on participants and nonparticipants. Results show that PES programs have been beneficial for participants. However, negative impacts have been found for nonparticipants. In detail, the participants' livelihood assets are greatly consolidated through a series of policies and institutions. These institutions have empowered participants to access to natural resources and excluded the others. Participants' livelihood strategies and sustainable livelihoods are further shaped and mediated by these institutions. Instead, nonparticipants are excluded from the project and prohibited to access to natural resources. Their livelihood assets and strategies are negatively influenced by resources relocation. Given the minimal trickle-down benefits and remarkable negative impacts, the nonparticipants' livelihoods are overall adversely affected by the project. Our study highlights the importance of disaggregated household analysis and dynamic perspective in evaluating livelihood impacts of PES. Policy strategies should consider household heterogeneity, livelihood framework and dynamic impacts in related environmental and development programs.