Increasing the efficiency of conservation spending

The case of payments for environmental services in Costa Rica

Payments for environmental services (PES) are an increasingly used instrument both forfinancing and implementing conservation. The Costa Rican national PES scheme is oftenconsidered as a leading model in this regard. We find that improved targeting couldsubstantially increase the efficiency of the program, in the sense that total environmentalservices achieved with a given budget were found to nearly double when environmentalbenefits, threat, and participation costs are considered in site selection. The results haveimplications for an upscaling of PES or the selection among potential conservation projects more generally. Nevertheless, targeting involves implementation costs and faces scientific, administrative and political challenges. Promising approaches for overcoming these challenges include: development of simple targeting tools; improved data availability; implementing targeting from the very start of a program; and using auctions to elicit participation costs.