Available online at www.sciencedirect.com Community-based water markets and collective payment for ecosystem services: toward a theory of community-based environmental markets☆ Sergio Villamayor-Tomas 1, Annika Hermann 1, ]] ]]]]]] ]] Laura van der Lingen 1 and Tanya Hayes 2 In the last few decades, the scope of governanceauthr solutions Current Opinion in Environmental Sustainability 2022, 59:101221 for environmental problems has increased substantially. The old This review comes from a themed issue on Open Issue trichotomy of governance by government, governance by markets, and governance by communities has been replaced Edited by Opha Pauline Dube, Victor Galaz and William Solecki by a new interest in hybrid solutions in the recognition that no For complete overview of the section, please refer to the article single-governance mode possesses the capabilities to address collection, “Open Issue” the multiple facets, interdependencies, and scales of current Available online 5th December 2022 environmental problems. This paper takes stock on https://doi.org/10.1016/j.cosust.2022.101221 experiences that combine community-based natural resource 1877–3435/© 2022 The Authors. Published by Elsevier B.V. This is an management and market-based solutions, or as we call them open access article under the CC BY-NC-ND license (http:// community-based environmental markets (CBEMs). creativecommons.org/licenses/by-nc-nd/4.0/). Specifically, we draw lessons from the literature on community- based payment for ecosystem services in the forest context, and from water markets in the context of water user associations (WUA markets). Similarities across the two contexts include the role of communities to ensure participation, compliance, and distributional equity, and the Introduction importance of markets as a source of revenue for communities, The trichotomy of governance by markets, communities, among others. Differences across highlight the importance to or governments has been surpassed by a new interest in pay attention to the authority held by the communities (stronger hybrid instruments, in the recognition that no single- in the context of WUA markets) and the nature of the market (i.e. governance mode possesses the capabilities to address the whether it is a service or a resource market). These multiple facets, interdependencies, and scales of current commonalities and differences motivate the interest of environmental problems [23,40,55,79]. New research generating new theory on CBEMs, that is, one that builds on but programs addressing the coexistence of different modes also transcends community-based natural resource of governance have emerged. A paradigmatic example is management and environmental market theory and allows to the scholarship on comanagement, which recognizes that compare experiences from different resource contexts. some governance functions are better carried jointly by governments and local communities, and identifies con- Addresses ditions under which that can be the case [10,24]. 1 ICTA-UAB, Spain 2 Institute of Public Service, Seattle University, USA Studies addressing the merits and challenges of commu- Corresponding author: Villamayor-Tomas, Sergio nity-market hybrids (heretofore community-based en- (Villamayortomas@gmail.com) vironmental markets (CBEMs)) are much scarcer. To be sure, there is considerable literature on community-based ☆ Environmental Science and Techology Institute (ICTA), Autonomous University of Barcelona (UAB)Edifici ICTA-ICP, Carrer de les Columnes s/n, Campus de la UAB, 08193 Cerdanyola del Vallès, Barcelona. www.sciencedirect.com Current Opinion in Environmental Sustainability 59 (2022) 101221 2 Open Issue payment for ecosystem service programs (C-PES) [15], of water scarcity and increased competition over water and community-based certification and ecotourism pro- resources [16]. In the fishing sector, the pooling of in- grams (e.g. [8,59,70]); and there is also literature on water dividual transferable quotas has been advocated as a markets in the context of water user associations (WUA) solution to overfishing and bycatch resulting from the [26,80], and a few works on pooled transferable fish complexity of certain marine Socio-Ecological Systems quotas [39,84], or community forest certification programs (SES) [39]. [48,6]. However, the literature is scattered across dis- ciplinary divides and resource contexts, which prevents Some PES literature has theorized around the role of knowledge cumulation. collective action [4,50,63] and proposed frameworks to study community PES that partially build on the dis- The hope embodied in hybrid modes of environmental tinction between community and market features governance is that they address the weaknesses of a [15,34]. As pointed to by these works, however, the particular mode and build on the strengths of the other relationship between local environmental markets mode(s). Environmental markets (i.e. tradable resource and communal governance conditions is still poorly use rights and services) have been promoted mostly for understood [34]. their economic efficiency related to resource allocation, and flexibility against environmental changes, and criti- This paper builds on the above efforts to draw lessons cized for their overemphasis on economic profitability across the diversity of CBEM experiences and move us over other values, generate or aggravate existing in- toward a theoretical framework for the study of CBEMs. equalities, and issues of democratic accountability The questions that guided this endeavor were: Can we [17,29,55]. Community-based natural resource manage- meaningfully study CBEMs experiences as hybrids of commu- ment (CBNRM), that is, the organizations, rules, and nity and market features? Which role can community organi- norms that articulate cooperation within local commu- zations play in environmental markets? How do nities, has been praised for coping with resource use environmental markets influence community governance? In interdependencies in complex socioecological contexts, addressing those questions, we also aimed to provide and associated with strong levels of social capital and preliminary answers to: Do commonalities and differences legitimacy, enforcement effectiveness, and fit with local across CBEM experiences reflect larger patterns? Could those conditions [1]; however, they have also been questioned patterns inform future larger comparative efforts? for being transaction-cost demanding, mostly effective at local scales, slow against environmental changes [49,7]. To answer the above questions, we reviewed the litera- ture of C-PES and WUA-based water markets (WUA The above theory aligns well with the reasons argued to markets), two prominent examples of CBEMs, in an at- either ‘communalize’ management in environmental tempt to disentangle the mutual influence of community market contexts, or ‘marketize’ rights in community- organizations and markets in those contexts.1 Irrigation governance contexts. In the forest sector, payment for systems are managed by WUAs in many countries ecosystem services (PES) programs simulate a market worldwide via common property regimes [15,34]. Some of through which stakeholders (e.g. downstream drinking these WUAs have combined share-based water distribu- water users) interested in a particular service (e.g. water tion and trading for years and even centuries [21,60]. quality) pay stakeholders with the means to provide such More recently, the increased competition over water re- service (upstream landowners) to adopt certain land use sources has also driven the institutionalization of transfers practices that ensure the service (e.g. forest conservation in riparian areas). Although prices are not usually set 1 according to a supply and demand basis, they are sup- The two reviews were based on larger reviews carried by the posed to reflect the preferences of the two groups of second and third authors in collaboration with the first author. These reviews were systematic in the search and content analysis of the stakeholders. However, prices do not always promote publications, and included a variety of other findings that can be found sufficient participation among providers or reflect their in van der Lingen [78] and Hermann [38]. The reviews, however, did preferences or local conditions. An answer to this deficit not aim at comprehensiveness, but just offer a preliminary exploration has been the search for local legitimacy and fit with local of patterns. After a keyword search and initial screening of the articles, socioecological conditions of the programs by organizing each of the two authors coded 34 WUA-market and 21C-PES studies. The coding was supervised by the first author for a selection of the providers into new or existing communal organizations articles. The review on C-PES was restricted to articles based in Latin and having them collectively decide whether to partici- America due to the relevance of community-based forest management pate, and/or co-design or manage the PES programs [63]. in that region and to the need to make the review manageable. The In the irrigation sector in many countries, water man- review on WUA markets aimed to be comprehensive but, contrary to agement authority resides with WUAs, which organize the PES literature, was confronted with the lack of explicit connections between community organizations (WUAs) and markets in the litera- farmers for water allocation among other tasks. Here, ture. This made the search and screening stages more difficult. It is for markets have been advocated as means to add flexibility these aspects that these reviews are not comprehensive, and this paper to the collective use rights held by WUAs, in the advent should be taken more as an effort to generate rather than to test theory. Current Opinion in Environmental Sustainability 59 (2022) 101221 www.sciencedirect.com Community-based environmental markets Villamayor-Tomas et al. 3 across WUAs and also to external users, mostly cities Similarities: nontrivial role of communities [27,67]. In C-PES, payment for desired conservation ac- Both CBEM contexts illustrate that community organi- tivities and/or ecosystem services is collectively made to a zations are not mere witnesses of markets but can have group of individuals. C-PES arrangements are often significant leverage to promote or hinder the im- considered an appropriate strategy to gain participation in plementation and sustainability of the markets. WUAs rural communities where residents collectively manage can promote participation in markets by articulating the their resource systems [50], and likewise, to reduce different willingness of farmers to sell or buy water, but transaction costs when working with groups of small also act as clearing houses and facilitate negotiations landowners and potentially conserve larger contiguous with the state and organizations in other sectors areas [47]. [28,32,32,41,42,51,58,75,83]. Regarding compliance, WUAs play an important role to ensure water availability We build our review on Hayes et al. [34,34], which ex- and distribution via storage and conveyance infra- plores the performance of C-PES with regard to three structure, as well as register, monitor, and enforce water aspects: i) the decision to participate in a CBEM and deliveries [77,80], provide technical support, and solve resolve associated conflicts, ii) effectiveness and com- conflicts [56]. WUAs also tend to ensure fair distribution pliance, and iii) the distribution of the costs and benefits of costs and benefits of market participation if only be- associated with the participation. From this perspective, cause they tend to operate according to cooperation and the question of participation is important because it casts proportionality principles [33,51,56]. doubt on both the willingness of individuals to partici- pate and the way preferences are aggregated. Also, the In C-PES programs, community assemblies and leaders responsibility to fulfill the market requirements (i.e. are well positioned to convey the benefits of participa- compliance and effectiveness) is not individual but col- tion and persuade communal and private landowners to lective, and this confronts participants with free riding participate. This is particularly the case if the commu- behavior and cooperation issues. Finally, the issue of nities can build on previous community-based devel- distribution of payoffs becomes also one of collective opment experiences, which is important if participation concern; communities’ internal decision-making struc- of individuals within communities is voluntary, that is, tures and power dynamics may ameliorate or aggravate community members are allowed to enroll PES in- the impact of markets on inequality. dependently [19]. In some cases, participation can ben- efit from collective binding decisions, that is, decisions Aligning with resource management theory, our review made by the ensemble of the community that everyone suggests that the property rights and decision-making has to abide by [3,12,19,46,53,64,65,72]. Moreover, pre- authority held by the communities [76], and whether existing resource management rules, prosocial norms, as transactions involve resources or services [92], could well as effective monitoring and sanctioning (including serve as a steppingstone for further theoretical devel- accountability of leaders) can notably reduce the chances opment in our understanding of hybrid modes of en- of free riding and corruption [3,12,19,20,22,46,65,73]. vironmental governance. Finally, distributional policies that are democratically decided by the community, can ensure equality and the Results and discussion protection of less wealthy community members Our observation of how community and market attri- [19,22,22,46], particularly in communities with pre-ex- butes influence participation, compliance, and distribu- isting social capital and egalitarian values [12,20,73]. tional aspects across the WUA markets and C-PES contexts2 reveals a series of similarities and differences On the negative side, pre-existing power asymmetries (see Table 1). Although with differences in richness (see within WUA's decision-making bodies can affect the below), both literatures directly or indirectly provide inclusiveness of participation decisions [30,77] and the insights about preference aggregation, free riding, and distributional effects of water markets if, for example, equality issues associated with participation in the mar- only certain WUA members are entitled to newly ac- kets, proving their relevance beyond the C-PES context quired water or some member’s rights are more vulner- [34,34]. In this section, we pick on those in an attempt to able to restrictions associated with the selling of water derive larger theoretical insights. [30,42,80]. Similarly, in the C-PES context, community organiza- 2 Here we refer to context as a broad group of CBEM cases, defined tions can jeopardize participation and even contribute to mostly by the resource at stake (i.e. forest or water) and the governance conflict if, for example, the organizations impose certain tradition from which they have been studied (PES or WUA, respec- participation and tenure conditions [5,13,19,74], or if said tively). Also, we refer to cases as temporally and spatially (locally) bounded instances of CBEMs in the two contexts under study. In the conditions are used as political weapons [25,61]; and review, we found some studies that contained information about more concentration of knowledge and decision power and the than one case. associated benefits around PES programs on certain www.sciencedirect.com Current Opinion in Environmental Sustainability 59 (2022) 101221 4 Table 1 Similarities and differences across the WUA markets and the C-PES contexts. Participation Compliance Distribution Open Issue Similarities and WUA Markets C-PES WUA Markets C-PES WUA Markets C-PES differences Similarities: non- + Articulating preferences + Convey benefits of + Ensure water + Possibility to build on existing + Cooperation and + Democratic practices can trivial role of and clearing/negotiating participation; enforce one storage and CBNRM rules that reduce free proportionality ensure equality29,30,32, communities prices for both internal voice in some cases24,25,26,28- conveyance riding behavior and principles favor 32 and external markets1-8 infrastructure14,15 corruption25,26,28-31,32 equality of costs and + Register and + Ensure additionality27,33,41 benefits1,10,12 - Power asymmetries in - Add participation enforce water + Ensure socio-ecological WUA decision making restrictions30,31,35-38 deliveries14,15 fit28,32,33,35 bodies13,14 - Failure to represent interest + Provide technical - Add participation of marginal groups24,30,36,45 support and solve restrictions3,13,15 - Economic incentives favor conflicts10 elite capture24,28,34,35 Differences: + Enforce one voice via + Mostly persuade; enforce + Formalization of property - Pre-existing water - Organizational capacity and community majority voting one voice in some cases24-30 rights 30 use right discretionary leadership authority + State can organize or + Dependence on state and + Institutional building25,27,31-33 asymmetries issues42,45 provide support4,6,8,9,10 NGOs promotion and + Strengthen social among farmers11,12 - Credibility to secure support24,25,30-34, 45 capital34,31,38,47 Current Opinion in Environmental Sustainability 59 (2022) 101221 property rights that are - Information issues and sold3,12 - Organizational capacity conflict due to lack of and leadership organizational capacity 24,28- 29,31,35,39,42,43 issues28,31,39-42- Bad experiences with previous community development projects43 Similarities: + Source of revenue for + Source of revenue for new - Speculative - Incentivize - Asymmetric - Reinforcement of existing opportunities WUA water management collective ventures and forms behavior11 encroachments30,31,42 benefits within inequality and power and risks of operations19 of participation25,31-33,39 - Crowding out of - Crowding out of cooperative WUAs13,14,15 imbalances24,28,45,35,38 markets cooperative behavior in some cases24,34,44 - Conflicts over distribution of behavior in some - Undermine traditional payments26,27,30 cases20 governance - Add confusion practices24,30,33,34 about property - Congest organizational rights17 capacity27 Differences: the + Resource allocation - Fail to recognize lack of - Externalities + In kind payments for nature of markets flexibility15,18 additionality29 between community development25, 31, 7,22,23 32, 33, 40, 43 WUAs - Fail to accommodate socio- economic heterogeneities within communties26 Note: ‘+’ and ‘-’ refers to whether the aspect contributes to or hinders performance, respectively, and is based on explicit statements found in the revised studies or our interpretation of the information contained in said studies. References: Water markets: [89]1, [28]2, [42]3, [83]4, [41]5, [58]6, [75]7, [32]8, [81]9, [56]10, [71]11, [33]12, [30]13, [77]14, [80]15, [37]16, [27]17, [31]18, [2]19, [86]20, [90]21, [54]22, [57]23. CB-PES: [53]24, [65]25, [93]26, [36]27, [3]28, [46]29, [19]30, [13]31, [64]31, [22]32, [66]33, [43]35, [87]34, [25]35, [61]36, [74]37, [5]38, [12]39, [44]40, [14]41, [18]42, [91]43, [43]44, [94]45, [52]46, [85]47. www.sciencedirect.com Community-based environmental markets Villamayor-Tomas et al. 5 community members can potentially favor ‘elite capture’ capacity of WUAs to guarantee tenure security can indeed in the decision-making resulting in benefits that are jeopardize participation, such as in some groundwater derived by only a few. This can not only harm partici- systems [42] or in cases where land and water use rights pation in PES, but also in local governance beyond PES lie in the hands of different actors [33]. The authority of programs [3,20,25,53]. WUAs is also evident with regard to some of the above- mentioned operational tasks and the management of Similarities: opportunities and risks of markets water infrastructure and allocation at large. Institutional Both contexts illustrate that markets can be an important compliance with markets is indeed less of an issue in the source of revenue for community operations and devel- literature as compared, for example, with the reproduc- opment. In the water context, WUAs can obtain rev- tion of vested interests and power asymmetries. To be enues and use them to cover the irrigation operation and sure, WUAs are supported by governments in many maintenance costs [2]. In the C-PE context, in kind, countries. Governments can both provide infrastructure, payments can occur in the form of funding or support for information, and monitoring resources [32,32,58,83] and community development projects such as potable water also ensure water tenure security [56,81]. However, this systems or social security mechanisms support is mostly complementary to the WUA's au- [12,22,22,64,65,66], the management of which can sti- tonomy. mulate participation in community affairs and political activism more broadly [18,18,65]. Alternatively, the authority of community organizations in C-PES is considerably less clear. Communities may be That said, markets can also reinforce uncooperative be- able to enforce participation through majority voting but havior. In the WUA context, they may add confusion most likely need also to use persuasion because partici- about the distribution of water use rights and corre- pation of individuals within communities may be volun- sponding collective management duties [27]; trigger tary, that is, when community members are allowed to speculative behavior among farmers [71]; or crowd out enroll PES independently [19]. Similarly, communities prosocial behavior [86]. In the C-PES context, programs’ may have formal authority but lack it de facto, due to lack administrative and organizational demands can under- of sufficient organizational capacity. This in turn trans- mine traditional (more community-oriented) governance lates into difficulties to pull sufficient social capital or practices [19,20,53,66] and congest the communities’ information to gather interest around PES, to negotiate organizational capacity [35]. Also, the ‘market’ logic can participation conditions [3,12,14,18,44,64], or to ensure crowd out prosocial and environmental values [19,44,53], compliance [3,18,25,46,53,91]. Also, governments and as well as incentivize illegal resource encroachments and NGOs are in many cases promoters of the markets. They privatization of collective resources [12,18,18]. not only ensure funding stability but also facilitate parti- cipatory processes, technical assistance and support, and Finally, markets can create or aggravate inequalities. In collective negotiations within the communities the WUA case, this may happen, for example, market [12,19,20,43,53,66].3 In some cases, they can also prevent prices are dominated by large farmers/companies [30,77], inequalities [20,65]. To be sure, and contrary to the or the initial allocation of rights is asymmetric from the WUA's case, the C-PES context includes quite a wide start [80]. In the C-PES case, it may happen if economic diversity of experiences of community organization in or political elites ‘capture’ the decision-making process terms of authority. The participating in the ‘market’ can [3,5,20,25,53]. be an opportunity for communities to have their collective land and political rights recognized or secured, and/or take Differences associated with community authority control over local natural resource management and Differences also emerge and these are equally important public services [19]; collective institutional building toward theorizing about CBEMs at large if put in suffi- [13,22,65,66,88] and to strengthen reciprocity relation- cient perspective. ships and social capital within communities [5,13,43,72,85]. Finally, there are cases (i.e. some ejido An important set of differences has to do with the au- instances in Mexico) where the community role is carried thority held by community organizations. out by community-based forest management organiza- tions (i.e. alike to WUAs) to which some of the above As holders of collective water use rights in most cases, implications might not apply [15]. WUAs have usually the last word about whether partici- pate in a market (i.e. sell or buy water) or not. This ap- plies both to the organization of transfers within their jurisdictions as well as the buying and selling of water 3 Note here that WUA markets, and water markets and WUAs at externally. Also, WUAs can hinder ‘free’ transactions by, large, also tend to be supported by governments. Still much of that for example, by restricting transfers to certain quantities support is limited to regulatory frameworks and in some cases to the or duration [33,71]. By the same token, the lack of organization of clearing houses (see Table 1). www.sciencedirect.com Current Opinion in Environmental Sustainability 59 (2022) 101221 6 Open Issue Differences associated with the nature of markets wealth, business models, or economic dependence from The WUA and C-PES experiences also point potential the resource [27,30,37,42,80], but they all share a similar difference dependent on the nature of the market and (usually economic) understanding and use of the re- the good exchanged, whether it is the resource (e.g. source. This is not necessarily the case in service mar- water) or an ecosystem service (e.g. water quality, bio- kets such as C-PES that can involve resource owners diversity conditions) that is being transacted [92]. In the that rely on and understand their relationship with the C-PES context, for example, scholars tend to focus on resource and/or the ecosystem service provided in quite additionality, that is, ensuring the added value of the different ways [11,47,52,82]. programs in terms of ecosystem services and the role that community organizations can play to ensure ecological A final difference has to do with the emphasis made on fit, and facilitate compliance [3,22,25,66]. Proving said the economic and monetary value of exchanges. Other additionality is, however, quite challenging more fre- than promoting conservation, PES have been defended as quently than not [69,9]. solutions against community poverty [68]. In this vein, the C-PES literature has been keen on the study of in- These fit and additionality concerns are rather absent in kind payments and their positive effects on community the WUA-market literature and replaced instead with development [5,12,18,22,64,65,66], as well as quite critical concerns about natural resource management (e.g. water of the monetary valuation of certain ecosystem services storage and conveyance). Central in the WUA-market [19,43,44,53]. These debates are rather absent in the literature are the benefits of markets in terms of water water market literature likely due to its focus on water as allocation flexibility and their capacity to minimize the an economic resource and the only marginal interest in incentives to violate allocation rules during water scar- conservation (as opposed to, e.g. allocative efficiency). We city periods [31,80]. Afterall, it is the resource itself that believe this can be associated again to the nature of the is transacted and not improvements in specific eco- good being transacted. The understanding of resources as system services (i.e. additionality). bundles of services that can be managed separately offers an opportunity to value each service in the most appro- The relationship between the buyers and the sellers also priate terms and circumvent the traditional understanding differs depending on the good exchanged. WUAs are in- of said resources as economic goods. volved in both the buying and selling of water externally and internally among their members or urban water users, while community organizations in C-PES contexts Conclusions: toward new theory on have so far been responsible for the selling of services community-based environmental markets externally, usually to users located far away and of mark- around community authority and the nature of edly different socioeconomic profiles and interests. Also, markets concerns raised in the WUA-market literature about scar- Our review, while not exhaustive, demonstrates a city externalities that emerge across communities thriving scholarship on hybrid governance that builds on [54,57,75] are rather absent in the C-PES literature. All this market-based and community-based solutions. The can be related to the nature of the markets in two ways. overview of WUA markets and C-PES sheds light on the First, water markets are understood as mechanisms to al- complexity behind CBEMs and hybrids at large. Still, locate water to the highest value and therefore there are no the similarities found across the two sectors illustrate the predefined buyers and sellers (it depends on needs and/or existence of general patterns and the interest of devel- willingness to pay), while (ecosystem) service markets have oping a larger research agenda on CBEMs. Just like so far been understood as a way to compensate certain CBNRM or markets alone, the performance (i.e. parti- resource owners for changes in the way they use the re- cipation rates, compliance, and equality) of both C-PES source. Second, the differences reflect varying monitoring and WUA markets depends on both community features requirements, as water (and natural resources at large) are, (e.g. institutional capacity, heterogeneities), and market everything being equal, easier to monitor than specific features (e.g. revenue, in-kind payments, role of gov- services provided by, for example, forests, and therefore ernments, and NGOs). More importantly, these features more prone to be exchanged in different directions and interact, and these interactions can both strengthen and visible in the resulting externalities. undermine the performance of the hybrid. As shown here, for example, community-based institutions can Associated with the above, is the relevance of socio- ameliorate the natural tendency of markets to promote economic heterogeneity within the communities in re- inequality within and between communities but can in lation to the resource or service sold. We found this to be that process also hinder participation in said markets. more of an issue in the C-PES than in the WUA- market literature. CBNRM organizations such as WUAs Also, the differences found across the two contexts point include relatively homogeneous user groups; farmers to how we might begin to classify CBEM arrangements within WUAs can be quite different with regard to and think about types of cases, so as to organize broader Current Opinion in Environmental Sustainability 59 (2022) 101221 www.sciencedirect.com Community-based environmental markets Villamayor-Tomas et al. 7 comparisons and understand larger patterns of perfor- 2. Al-Marshudi AS: The falaj irrigation system and water allocation mance. Namely, our review suggests that a classification markets in Northern Oman. Agric Water Manag 2007, 91:71-77. that observes the distribution of property rights and as- 3. Almeida-Leñero L, Revollo-Fernández D, Caro-Borrero A, Ruiz- sociated management authority, and the nature of mar- Mallén I, Corbera E, Mazari-Hiriart M, Figueroa F: Not the same for everyone: Community views of Mexico’s payment for kets, and nature of markets, can serve as a steppingstone environmental services programmes. Environ Conserv 2017, toward a theoretical framework for CBEMs. We believe 44:201-211. these two features could be used to meaningfully dis- 4. Barnaud C, Corbera E, Muradian R, Salliou N, Sirami C, Vialatte A, tinguish types of experiences that have so far been Choisis JP, Dendoncker N, Mathevet R, Moreau C, Reyes-García V, Boada M, Deconchat M, Cibien C, Garnier S, Maneja R, Antona treated separately in the water, fishing, or forest M: Ecosystem services, social interdependencies, and sector experiences (e.g. pooled fish quotas, community collective action: a conceptual framework. Ecol Soc 2018, 23:15. forest certification, community ecotourism…). Further research shall test the classification against a larger set of 5. Bétrisey F, Bastiaensen J, Mager C: Payments for ecosystem services and social justice: using recognition theories to carefully sampled cases (e.g. C-PES where communities assess the Bolivian Acuerdos Recíprocos por el Agua. have different degrees of authority, or WUA markets vs. Geoforum 2018, 92:134-143. community-based payments for hydrological services). 6. Bhattarai BP, Kunwar RM, Kc R: Forest certification and FSC Also, one should not take the ‘old’ trichotomy of gov- standard initiatives in collaborative forest management system in Nepal. Int Rev 2019, 21:416-424. ernance by markets, communities, or governments as obsolete. Theory on each of these modes of governance 7. Blaikie P: Is small really beautiful? Community-based natural resource management in Malawi and Botswana. World Dev alone keeps evolving, for example, by integrating in- 2006, 34:1942-1957. stitutional analysis and political ecology lenses [95] and 8. Bluwstein J: Creating ecotourism territories: environmentalities shall offer new insights into the study of CBNRMs. As in Tanzania’s community-based conservation. Geoforum 2017, shown in our review, governments and NGOs can in- 83:101-113. deed play important roles in CBEMs. Further research 9. Börner J, Baylis K, Corbera E, Ezzine-de-Blas D, Honey-Rosés J, shall thus better conceptualize and integrate them in the Persson UM, Wunder S: The effectiveness of payments for environmental services. World Dev 2017, 96:359-374. classification. 10. Botto-Barrios D, Saavedra-Díaz LM: Assessment of Ostrom’s social-ecological system framework for the comanagement of Data Availability small-scale marine fisheries in Colombia: from local fishers’ perspectives. Ecol Soc 2020, 25:12. Data will be made available on request. 11. Bremer LL, Brauman KA, Nelson S, Prado KM, Wilburn E, Fiorini ACO: Relational Values in Evaluations of Upstream Social Outcomes of Watershed Payment for Ecosystem Services: A Declaration of Competing Interest Review. Elsevier B.V.; 2018 (December 1). 12. Bremer LL, Farley KA, Lopez-Carr D: What factors influence The authors declare the following financial interests/ participation in payment for ecosystem services programs? An personal relationships which may be considered as po- evaluation of Ecuador’s SocioPáramo program. Land Use Policy 2014, 36:122-133. tential competing interests. 13. Bremer LL, Farley KA, Lopez-Carr D, Romero J: Conservation and livelihood outcomes of payment for ecosystem services in the Acknowledgements Ecuadorian Andes: what is the potential for “win-win”? Ecosyst This work contributes to the ‘María de Maeztu Unit of Excellence’ Serv 2014, 8:148-165. (CEX2019-000940-M). Sergio Villamayor-Tomas, would like to acknowl- edge the European Commission funding under the Marie Curie Actions 14. Brownson K, Anderson EP, Ferreira S, Wenger S, Fowler L, German L: Governance of Payments for Ecosystem Ecosystem services (Individual Fellowships contract Nr. 660089–COMOVE), the Ramon y influences social and environmental outcomes in Costa Rica. Cajal Fellowship of the Spanish Ministry of Science and Innovation (RyC- Ecol Econ 2020, 174:106659. 2017-22782). Tanya Hayes would like to acknowledge support from the National Science Foundation SES (# 1734051). 15. Brownson K, Guinessey E, Carranza M, Esquivel M, Hesselbach H, • Madrid Ramirez L, Villa L: Community-Based Payments for Ecosystem Services (CB-PES): implications of community Appendix A. Supporting information involvement for program outcomes. Ecosyst Serv 2019, 39:100974. Supplementary data associated with this article can be This paper presents a conceptual framework and literature review for found in the online version at doi:10.1016/j.cosust.2022. evaluating the contextual factors influencing community participation in PES and the outcomes of community participation. As shown in the 101221. results, the literature demonstrates how a range of participatory me- chanisms can improve social capital, community assets and the legiti- References and recommended reading macy of PES, which may feedback to improve community support over time. However, there is limited evidence that Community-based-PES Papers of particular interest, published within the period of review, have improves environmental outcomes and mixed evidence for equity and been highlighted as: economic efficiency outcomes. There is also wide variation in the level of community engagement in CB-PES. In some contexts, additional efforts •• of special interest may be needed to strengthen property rights and institutional capacity to increase community engagement in CB-PES. 1. Acheson JM: Institutional failure in resource management. Annu 16. Chong H, Sunding D: Water markets and trading. Annu Rev Rev Anthropol 2006, 35:117-134. Environ Resour 2006, 31:239-264. www.sciencedirect.com Current Opinion in Environmental Sustainability 59 (2022) 101221 8 Open Issue 17. Copes P, Anthony C: Socioeconomics of individual transferable 30. Gross C, Dumaresq D: Taking the longer view: timescales, quotas and community-based fishery management. Agric fairness and a forgotten story of irrigation in Australia. J Hydrol Resour Econ Rev 2004, 33:171-181. 2014, 519:2483-2492. 18. Corbera E, Costedoat S, Ezzine-de-Blas D, Van Hecken G: 31. Hadjigeorgalis E: Managing drought through water markets: • Troubled encounters: payments for ecosystem services in farmer preferences in the Rio Grande Basin. J Am Water Resour Chiapas. Mex Dev Change 2020, 51:167-195. Assoc 2008, 44:594-605. This article examines a PES programme in a rural community of Chiapas, Mexico. It shows that while a majority of the community's 32. Hamamouche MF, Kuper M, Hartani T, Bouarfa S: Overlapping landowners have engaged in PES through two distinct working groups, • groundwater service markets in a Palm Grove in the Algerian a large share of the community forests remain outside the PES pro- Sahara. Irrig Drain 2020, 69:155-167. gramme, and many landowners resist the extension of PES rules to non- This study analyses the emergence and functioning of groundwater targeted forests. The authors argue that this incipient form of frag- service markets from a historical perspective in the Sidi Okba oasis in mented collective action on forest management results from challenged the Algerian Sahara to advance the understanding of the role of social leaderships, and from PES accommodating a history of increasing in- power games in shaping these institutions. By continuously adjusting dividuation of the commons. This article shows the limits of PES when water management and market institutions, the highly diverse irrigation parachuted into a context of uneven land tenure, weak collective action community prevented the emergence of a monopoly in groundwater and contested leaderships. sales and maintained the balance of power between water sellers and buyers by countering possible control of groundwater access by a single 19. Corbera E, Kosoy N, Martínez Tuna M: Equity implications of socio-ethnic or economic group. marketing ecosystem services in protected areas and rural communities: case studies from Meso-America. Glob Environ 33. Hanemann M: Property rights and sustainable irrigation-a Change 2007, 17:365-380. developed world perspective. Agric Water Manag 2014, 145:5-22. 20. Córdoba D, Pischke EC, Selfa T, Jones KW, Avila-Foucat S: When payment for ecosystem services meets culture: a culture 34. Hayes T, Grillos T, Bremer LL, Murtinho F, Shapiro E: Collective theory perspective. Soc Nat Resour 2021, 34:505-523. • PES: More than the Sum of Individual Incentives. Elsevier Ltd; 2019 (December 1). 21. Cox M, Arnold G, Villamayor-Tomás S: A review of design This study synthesizes findings from studies of the social and behavioral principles for community-based natural resource outcomes of collective PES programs. The collective PES model is management. Ecol Soc 2010, 15:38. distinct from the conventional PES model in that by working with groups, not individuals, it breaks the direct relationship between an in- 22. Denham D: Community forest owners evaluate a decade of dividual’s consent to participate, the economic incentive and the ex- • payments for ecosystem services in the Mexican Cloud Forest: pected conservation behavior. In doing so, it raises concerns about the importance of attention to indigenous sovereignty in whether the collective model is effective and socially just. Here, they conservation. Soc Nat Resour 2017, 30:1064-1079. assess these concerns by synthesizing findings on four distinct chal- This study examines a PES case that has contributed both to forest lenges for collective PES: (i) voluntary and informed participation; (ii) conservation and to community livelihoods. In this study, community household compliance with PES restrictions; (iii) the balance of costs forest owners from four indigenous communities in the Mexican cloud and benefits across community members; and (iv) the interaction with forest evaluate their participation in ten years of a public PES pro- local governance conditions to address the second-order collective gram to support watershed stewardship. We argue that attention to action problem inherent in collective PES. Through a review of 41 stu- indigenous sovereignty and self-determination in program im- dies covering 16 collective PES programs located in 12 countries, they plementation contributed to widely appreciated socio-environmental show how program design and local governance dynamics can influ- benefits. ence the ability of collective PES to attain desired social and behavioral outcomes. 23. Driessen PPJ, Dieperink C, Laerhoven F, Runhaar HAC, Vermeulen WJV: Towards a Conceptual framework for the study of shifts 35. Hayes T, Murtinho F: Communal governance, equity and in modes of environmental governance - experiences from The • payment for ecosystem services. Land Use Policy 2018, Netherlands. Environ Policy Gov 2012, 22:143-160. 79:123-136. The study examines the relationship between local governance and the 24. Frey UJ, Villamayor-Tomas S, Theesfeld I: A continuum of distribution of collective payments in an Ecuadorian payment for con- governance regimes: a new perspective on co-management in servation program implemented in communities in the Andean high- irrigation systems. Environ Sci Policy 2016, 66:73-81. lands. They use household data living in six participating communities to examine how communities distribute collective payments across com- 25. García-Amado LR, Pérez MR, Escutia FR, García SB, Mejía EC: munity members. The results highlight that households in more orga- Efficiency of payments for environmental services: equity and nized communities are more likely to receive a benefit and are more additionality in a case study from a Biosphere Reserve in likely to perceive that the distribution is fair. In contrast, those in less Chiapas, Mexico. Ecol Econ 2011, 70:2361-2368. organized communities are less likely to have budgetary information or 26. Garrick D, De Stefano L, Yu W, Jorgensen I, O’Donnell E, Turley L, agree with how the collective payment is spent. The results also indicate • Aguilar-Barajas I, Dai X, De Souza Leão R, Punjabi B, Schreiner B, that communities generally distribute the benefits based on egalitarian Svensson J, Wight C: Rural Water for Thirsty Cities: A principles and point to a potential disjuncture between communal equity Systematic Review of Water Reallocation from Rural to Urban principles and the individual costs incurred under the PES program Regions. Institute of Physics Publishing; 2019 (April 11). land-use restrictions. This systematic review of rural-to-urban reallocation cases illustrates 36. Hayes T, Murtinho F, Wolff H: The impact of payments for how supply and demand interact to drive water reallocation (i.e. market) environmental services on communal lands: an analysis of the projects, which can take many forms, although in many cases they in- factors driving household land-use behavior in Ecuador. World volve transfer of water from irrigation communities to cities. It also re- Dev 2017, 93:427-446. veals that data regarding the impacts on the donor region and compensation are limited, constraining evidence to assess whether a 37. Hearne RR, William Easter K: The economic and financial gains water reallocation project is truly effective, equitable and sustainable. from water markets in Chile. Agric Econ 1997, 15:187-199. 27. Garrido S: Governing scarcity. Water markets, equity and 38. Hermann A: Hybrid Governance Systems of Water Markets and efficiency in pre-1950s eastern Spain. Int J Commons 2011, Water User Associations: A Systematic Case Study Review. 5:513-534. Universitat Autonoma de Bacelona; 2021, 〈https://ddd.uab.cat/ record/257899〉. 28. Gastélum JR, Valdés JB, Stewart S: An analysis and proposal to improve water rights transfers on the Mexican Conchos basin. 39. Holland DS, Jannot JE: Bycatch risk pools for the US West Coast Water Policy 2009, 11:79-93. Groundfish Fishery. Ecol Econ 2012, 78:132-147. 29. Gómez-Baggethun E, Muradian R: In Markets We Trust? Setting 40. Howlett M, Vince J, Del Río P: Policy integration and multi-level the Boundaries of Market-Based Instruments in Ecosystem governance: dealing with the vertical dimension of policy mix Services Governance. Elsevier B.V.; 2015 (September 1). designs. Polit Gov 2017, 5:69-78. Current Opinion in Environmental Sustainability 59 (2022) 101221 www.sciencedirect.com Community-based environmental markets Villamayor-Tomas et al. 9 41. Huang G: From water-constrained to water-driven sustainable 61. Milne S, Adams B: Market Masquerades: uncovering the politics development-a case of water policy impact evaluation. of community-level payments for environmental services in Sustainability 2015, 7:8950-8964. Cambodia. Dev Change 2012, 43:133-158. 42. Imache A, Bouarfa S, Kuper M, Hartani T, Dionnet M: Integrating 63. Muradian R: Payments for ecosystem services as incentives for “invisible” farmers in a regional debate on water productivity: collective action. Soc Nat Resour 2013, 26:1155-1169. the case of informal water and land markets in the Algerian Mitidja plain. Irrig Drain 2009, 58:S264-S272. 64. Murtinho F, Hayes T: Communal Participation in Payment for Environmental Services (PES): unpacking the collective 43. Jones KW, Avila Foucat S, Pischke EC, Salcone J, Torrez D, Selfa decision to enroll. Environ Manag 2017, 59:939-955. T, Halvorsen KE: Exploring the connections between participation in and benefits from payments for hydrological 65. Nieratka LR, Bray DB, Mozumder P: Can payments for services programs in Veracruz State, Mexico. Ecosyst Serv environmental services strengthen social capital, encourage 2019, 35:32-42. distributional equity, and reduce poverty? Conserv Soc 2015, 13:345-355. 44. Jones KW, Muñoz Brenes CL, Shinbrot XA, López-Báez W, Rivera- Castañeda A: The influence of cash and technical assistance on 66. Osborne T, Shapiro-Garza E: Embedding carbon markets: household-level outcomes in payments for hydrological complicating commodification of ecosystem services in services programs in Chiapas, Mexico. Ecosyst Serv 2018, Mexico’s forests. Ann Am Assoc Geogr 2018, 108:88-105. 31:208-218. 67. Ostrom E: Governing The Commons. Cambridge University 46. Joslin AJ: Unpacking ‘success’: applying local perceptions to Press; 1990. interpret influences of water fund payments for ecosystem services in the Ecuadorian Andes. Soc Nat Resour 2019, 68. Pagiola S, Arcenas A, Platais G: Can payments for environmental 32:617-637. services help reduce poverty? An exploration of the issues and the evidence to date from Latin America. World Dev 2005, 47. Kaczan D, Pfaff A, Rodriguez L, Shapiro-Garza E: Increasing the 33:237-253. impact of collective incentives in payments for ecosystem services. J Environ Econ Manag 2017, 86:48-67. 69. Pattanayak SK, Wunder S, Ferraro PJ: Show me the money: do payments supply environmental services in developing 48. Kalonga SK, Midtgaard F, Eid T: Does forest certification countries? Rev Environ Econ Policy 2010, 4:254-274. enhance forest structure? empirical evidence from certified 70. Phelan A, (Anya) L, Ruhanen, Mair J: Ecosystem services community-based forest management in Kilwa District, approach for community-based ecotourism: towards an Tanzania. Int Rev 2015, 17:182-194. equitable and sustainable blue economy. J Sustain Tour 2020, 49. Kellert SR, Mehta JN, Ebbin SA, Lichtenfeld LL: Community 28:1665-1685. natural resource management: promise, rhetoric, and reality. 71. Pincus J, Shapiro P: Between forced resumption and voluntary Soc Nat Resour 2000, 13:705-715. sale: a mechanism for the collective sale or transfer of 50. Kerr JM, Vardhan M, Jindal R: Incentives, conditionality and irrigation water. Econ Pap 2008, 27:303-314. collective action in payment for environmental services. Int J 72. Rodríguez-Robayo KJ, Merino-Perez L: Contextualizing context Commons 2014, 8:595-616. in the analysis of payment for ecosystem services. Ecosyst Serv 51. Kloezen WH: Water markets between Mexican water user 2017, 23:259-267. associations. Water Policy 1998, 1:437-455. 73. Rodríguez-Robayo KJ, Perevochtchikova M, Ávila-Foucat S, De la 52. Kosoy N, Corbera E, Brown K: Participation in payments for Mora De la Mora G: Influence of local context variables on the ecosystem services: case studies from the Lacandon outcomes of payments for ecosystem services. Evidence from rainforest, Mexico. Geoforum 2008, 39:2073-2083. San Antonio del Barrio, Oaxaca, Mexico. Environ, Dev Sustain 2020, 22:2839-2860. 53. Krause T, Collen W, Nicholas KA: Evaluating safeguards in a conservation incentive program: participation, consent, and 74. Saito-Jensen M, Rutt RL, Chhetri BBK: Social and environmental benefit sharing in indigenous communities of the Ecuadorian tensions: affirmative measures under REDD + carbon payment Amazon. Ecol Soc 2013, 18. initiatives in Nepal. Hum Ecol 2014, 42:683-694. 54. Lange M, Winstanley A, Wood D: Drivers and barriers to water 75. Sanchis-Ibor C, García-Mollá M, Torregrosa T, Ortega-Reig M, transfer in a New Zealand irrigation scheme. J Environ Plan Sevilla Jiménez M: Water transfers between agricultural and Manag 2008, 51:381-397. urban users in the region of valencia (spain). A case of weak governance? Water Secur 2019, 7:1-7. 55. Lemos MC, Agrawal A: Environmental governance. Annu Rev Environ Resour 2006, 31:297-325. 76. Schlager E, Ostrom E: Property-rights regimes and natural resources: a conceptual analysis. Land Econ 1992, 68:249-262. 56. Lepper T, Freeman D: Comparing forms of common property resource and collective goods organizations operating water 77. Urquiza A, Billi M: Water markets and social–ecological markets in the Colorado lower Arkansas river basin. Am J Econ • resilience to water stress in the context of climate change: an Sociol 2010, 69:1251-1278. analysis of the Limarí Basin, Chile. Environ Dev Sustain 2020, 22:1929-1951. 57. Libecap, B.G.D.: American Economic Association Institutional Path The paper proposes an analysis of the social–ecological resilience of the Dependence in Climate Adaptation: Coman’s "Some Unsettled Limarí Basin, an agriculture-intensive dryland in the north of Chile, Problems of Irrigation", Author (s): Gary D. Libecap Source: The featuring one of the most innovative market-based water managements American Economic Review. (2016) 101(1):64–80 (vol . 101 , No. 1 and the most active water rights market in the country, but concurrently (FEBRUARY 2011), pp. 64-80). affected by an ongoing water stress situation. The findings point that water scarcity is self-produced: despite the flexibility provided by 58. Liu Y, Li P, Zhang Z: Resilient or Not: a comparative case study market-based water management, the combined effect of strong de- of ten local water markets in China. Sustainability 2018, 10:4020. regulation, of the absence of territorial planning and integrated man- agement of water resources, and of short-term attitudes and 59. Lonn P, Mizoue N, Ota T, Kajisa T, Yoshida S: Evaluating the generalized mistrust, has led the system to the critical situation it is now Contribution of Community-based Ecotourism (CBET) to facing. household income and livelihood changes: a case study of the Chambok CBET Program in Cambodia. Ecol Econ 2018, 78. van den Lingen L: Justice in Collective Payments for Ecosystem 151:62-69. Services: A Qualitative Meta-Analysis. Universitat Autonoma de Barcelona; 2021, 〈https://ddd.uab.cat/record/257880〉. 60. Ma’Mun SR, Loch A, Young MD: Robust irrigation system institutions: a global comparison. Glob Environ Change 2020, 79. Vatn A: An institutional analysis of payments for environmental 64:102128. services. Ecol Econ 2010, 69:1245-1252. www.sciencedirect.com Current Opinion in Environmental Sustainability 59 (2022) 101221 10 Open Issue 80. Villamayor-Tomas S: Cooperation in common property regimes 87. Córdoba D, Pischke EC, Selfa T, Jones KW, Avila-Foucat S: When • under extreme drought conditions: empirical evidence from the Payment for Ecosystem Services Meets Culture: A Culture use of pooled transferable quotas in Spanish irrigation Theory Perspective. Society and Natural Resources (4) 2021, systems. Ecol Econ 2014, 107:482-493. 34:505-523, https://doi.org/10.1080/08941920.2020.1849482 This paper compares the performance of 38 irrigation associations in a large irrigation area in Spain during a severe drought as a test of hy- 88. Hayes T, Murtinho F, Wolff H: An institutional analysis of potheses derived from property right theories. The case is particularly Payment for Environmental Services on collectively managed interesting because it contains a transferable quota institution that can lands in Ecuador. Ecological Economics 2015, 118:81-89, https:// potentially strengthen the effectiveness of common property regimes in doi.org/10.1016/j.ecolecon.2015.07.017 scarcity conditions. According to the results the use of transferable 89. Kloezen WH: Water markets between Mexican water user quotas across associations can contribute to cooperation and drought associations. Water Policy (4) 1998, 1:437-455, https://doi.org/10. performance. In this context, performance is higher when the associa- 1016/S1366-7017(98)00031-2 tions enjoy (1) effective monitoring systems, (2) experience and legit- imate leaders, and (3) facilitative biophysical conditions like soil water 90. Mukherji A: Implications of alternative institutional holding capacity. arrangements in groundwater sharing: Evidence from West Bengal. Economic and Political Weekly (26) 2007, 42:2543-2551. 81. Wagner M, Kaiser R, Kreuter U, Wilkins N: Managing the commons Texas style: wildlife management and ground-water 91. Otto J: Precarious Participation: Assessing Inequality and Risk associations on private lands. J Am Water Resour Assoc 2007, in the Carbon Credit Commodity Chain. Annals of the American 43:698-711. Association of Geographers (1) 2019, 109:187-201, https://doi.org/ 10.1080/24694452.2018.1490167 82. Zanella MA, Schleyer C, Speelman S: Why do farmers join Payments for Ecosystem Services (PES) schemes? An 92. Penker M, Enengel B, Mann C, Aznar O: Understanding assessment of PES water scheme participation in Brazil. Ecol Landscape Stewardship – Lessons to be Learned from Public Econ 2014, 105:166-176. Service Economics. Journal of Agricultural Economics (1) 2013, 64:54-72, https://doi.org/10.1111/j.1477-9552.2012.00363.x 83. Zheng H, Wang Z, Liang Y, Calow RC: A water rights constitution for hangjin irrigation district, inner Mongolia, China. Int J Water 93. Rodríguez-Robayo KJ, Perevochtchikova M, Ávila-Foucat S, de la Resour Dev 2009, 25:373-387. Mora De la Mora G: Influence of local context variables on the outcomes of payments for ecosystem services. Evidence from 84. Zhou R, Segerson K: Individual vs. Collective Approaches to San Antonio del Barrio, Oaxaca, Mexico. Environment, Fisheries Management. MRE Foundation; 2016. Development and Sustainability (4) 2020, 22:2839-2860, https://doi. org/10.1007/s10668-019-00321-8 85. Alix-Garcia JM, Sims KRE, Orozco-Olvera VH, Costica LE, Fernández Medina JD, Monroy SR: Payments for environmental 94. Verde Selva G, Pauli N, Kiatkoski Kim M, Clifton J: Opportunity for services supported social capital while increasing land change or reinforcing inequality? Power, governance and management. Proc Natl Acad Sci U S A (27) 2018, 115:7016-7021, equity implications of government payments for conservation https://doi.org/10.1073/pnas.1720873115 in Brazil. Environmental Science and Policy 2020, 105:102-112, https://doi.org/10.1016/j.envsci.2020.01.001 86. Carrasco A: A Biography of Water in Atacama, Chile: Two Indigenous Community Responses to the Extractive 95. Villamayor-Tomas S, García-López GA: Commons Movements: Encroachments of Mining. Journal of Latin American and Old and New Trends in Rural and Urban Contexts. Annual Caribbean Anthropology (1) 2016, 21:130-150, https://doi.org/10. Review of Environment and Resources (1) 2021, 46:511-543, 1111/jlca.12175 https://doi.org/10.1146/annurev-environ-012220-102307 Current Opinion in Environmental Sustainability 59 (2022) 101221 www.sciencedirect.com