Recasting payments for ecosystem services (PES) in water resource management: A novel institutional approach

Understanding linkages between human well-being and ecological stewardship at the land-water nexus is needed in order to develop effective, equitable, and resilient institutions to govern watershed resources. In this paper, we argue that payments for ecosystem services (PES) plays a useful role for achieving integrated and adaptive water resource management, but only if attention is drawn to: (a) nested governance arrangements which reflect horizontal coordination across space according to the economic characteristics of watershed goods and services as well as hierarchical legitimacy between higher and lower levels of governance; (b) 'payments' that are socially negotiated rather than designed according to oversimplified efficiency claims for watershed services and (c) 'payments' that are well placed to overcome the individual, social and physical constraints associated with watershed goods and services so that capabilities or the freedom to do and be can be enhanced. This paper illustrates the impossibility of effectuating sheer market-based trades for regulating, cultural and supporting ecosystem services due to their inherent non-rival characteristics. Furthermore, a heuristic approach to characterising watershed goods and services clearly demarcates the extent to which PES can serve as an implementation tool for integrated and adaptive water resources management.