Assessing the Effectiveness of Payments for Ecosystem Services: an Agent-Based Modeling Approach

Payments for ecosystem services (PES) have increasingly been implemented to protect and restore ecosystems worldwide. The effectiveness of conservation investments in PES may differ under alternative policy scenarios and may not be sustainable because of uncertainties in human responses to policies and dynamic human-nature interactions. To assess the impacts of these interactions on the effectiveness of PES programs, we developed a spatially explicit agent-based model: human and natural interactions under policies (HANIP). We used HANIP to study the effectiveness of China’s Natural Forest Conservation Program (NFCP) and alternative policy scenarios in a coupled human-nature system, China’s Wolong Nature Reserve, where indigenous people’s use of fuelwood affects forests. We estimated the effects of the current NFCP, which provides a cash payment, and an alternative payment scenario that provides an electricity payment by comparing forest dynamics under these policies to forest dynamics under a scenario in which no payment is provided. In 2007, there were 337 km2 of forests in the study area of 515 km2. Under the baseline projection in which no payment is provided, the forest area is expected to be 234 km2 in 2030. Under the current NFCP, there are likely to be 379 km2 of forests in 2030, or an increase of 145 km2 of forests to the baseline projection. If the cash payment is replaced with an electricity payment, there are likely to be 435 km2 of forests in 2030, or an increase of 201 km2 of forests to the baseline projection. However, the effectiveness of the NFCP may be threatened by the behavior of newly formed households if they are not included in the payment scheme. In addition, the effects of socio-demographic factors on forests will also differ under different policy scenarios. Human and natural interactions under policies (HANIP) and its modeling framework may also be used to assess the effectiveness of many other PES programs around the world.