Payment for ecosystem services:emerging lessons

Market based initiatives for management of degrading ecosystems and their services have received the added attention as one of the innovative responses in the recent years. Those initiatives such as direct and indirect payment for ecosystem services like premium for rain forest honey, payment by the people at the lower reach to those at the upper reach for the watershed services etc. have drawn the attention of the decision makers as they have proved to be far more cost effective. This paper synthesizes the key messages from some of the celebrated but well established market for ecosystem services across the world. The ecosystem services considered in the paper are car-bon, watershed services and biodiversity. We find that while credible valuation of ecosystem services for all services remain a critical concern behind setting up the payment mechanism, absent of necessary institutional framework may seriously undermine this innovative response for management of ecosystems. In the paper, necessary institution-al mechanisms enabling the market for those services have been sketched out. Key messages from those cases have been synthesized.