MERGING ENVIRONMENTAL ECONOMICS AND COLLABORATIVE POLICY DESIGN TO ADVANCE ENVIRONMENTAL GOVERNANCE AND ECOSYSTEM SERVICES PROVISION: THE CASE OF OAXACA, MEXICO

Abstract

Payment for Ecosystem Services projects (PES) are increasingly popular because of their supposed potential to achieve social and environmental goals. However, the various challenges around their design and implementation often impede their achievement of such goals. These challenges have been framed by economists as transaction costs; and they usually involve information incompleteness and people´s willingness to engage. Similar to other environmental management tools, in PES projects, the information used to define problems and structure decision making is highly sensitive and hotly contested. Stakeholders´ distinct values and interests often shape knowledge legitimacy. In response, environmental economics often hide these conflicts behind technicalities and complex theoretical assumptions. Previous stories of mistrust and conflict often define people´s willingness to engage in PES projects. The presence of conflict in environmental policy design can be a motor to improve the project’s governance instead of a threat to reaching its goals. To use conflict as a motor, this project proposes understanding and dealing with the conflict that increases transaction costs; and use deliberative methods and practice of mediated negotiation to overcome them. This project implemented three participatory methods derived from the literature on planning: joint fact-finding and deliberative economic valuation were used to overcome information incompleteness. Such methods allowed diverse stakeholders with a history of conflict to collaboratively produce information about the watershed and the economic benefits of its conservation. Mediated negotiation was used to enable the conditions to create trust and willingness to collaborate between actors. Although literature exists on the theoretical expected benefits from using participatory and deliberative methods, few documented real-life cases of these methods exist for PES design and implementation. This article bridges this gap in the literature by presenting evidence of successful implementation of a community-based deliberative PES project in Oaxaca, Mexico – an area characterized by conflict, weak institutions, and persistent socioecological problems. This project was implemented in 2018 and is still running today (April 2020) with the support of local actors who recognize the value of the provision of ecosystem services and collaboration.