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Mexico’s Payments for Ecosystem Services (PES) programme is the combination of two previously separate programmes: the Payments for Hydrological Environmental Services Programme (PSAH) and the Programme of Payments for Carbon, Biodiversity and Agroforestry Services (PSA-CABSA). These programmes were merged in 2006, at the same time that poverty alleviation was introduced as a programme objective (Alix-Garcia et al., 2014; Muñoz-Piña et al., 2008). The programme currently offers two types of cash compensation: payments for watershed services, and payments for biodiversity conservation (Aemi et al., 2013).
Implementing this programme is not an easy task. The country has nearly 125 million people, with an expanding urban network (almost 80 per cent now live in cities); a growing economy constantly exposed to global crisis and a highly unequal distribution of wealth, especially in rural areas and among indigenous groups. Almost 80 per cent of the country is managed as ejidos (communal lands with emphasis on social benefits), a property regime that underpins the PES programme. Urban expansion and demand for resources drive deforestation and put significant pressure on water: for supply to cities, for agriculture and industry, and for dealing with waste and pollution. Both water and deforestation are considered national security issues by the government.

This case study is one of several relating to the Toolkit: Ecosystems, poverty alleviation and conditional transfers. To access the full toolkit and other related case studies, please visit the ‘Publications’ section of the IIED project linked at the bottom of this page.