This report synthesizes global evidence on Payments for Ecosystem Services (PES)—programs that provide financial incentives for landholders to conserve forests and other natural resources. While PES can reduce deforestation and improve rural livelihoods, their success depends on local, behavioral, and implementation factors that determine whether results achieved in one context can be replicated elsewhere and at scale.

Building on over 40 experimental and quasi-experimental studies and implementation documentation, with a focus on national programs in countries such as Costa Rica, Mexico, Ecuador,  and China, the report identifies three dimensions that shape effectiveness and scalability:

• Local conditions – aligning payments with the opportunity cost of land use and ensuring sufficient tenure security to enforce contracts.
• Behavioral responses – leveraging fairness perceptions, loss aversion, and monitoring salience, and using innovations such as full-enrollment or auctions to strengthen compliance and increase efficiency.
• Implementation conditions – maintaining strong “plumbing” systems for land verification, monitoring, timely payments, and low transaction costs.

The synthesis also highlights that reliable financing is essential for long-term sustainability, while noting that mechanisms such as earmarked taxes, public budgets, user payments, and blended finance differ in their stability. 

Developed under IPA’s Best Bets evidence-to-scale agenda, this analysis provides actionable guidance for policymakers and practitioners designing or expanding PES programs, clarifying where, how, and under what conditions they are most likely to deliver lasting environmental and social impact.