Few payment for environmental services (PES) schemes in developing countries operate outside of the central state's umbrella, and are at the same time old enough to allow for a meaningful evaluation. Ecuador has two such decentralised, consolidated experiences: the five-year old Pimampiro municipal watershed-protection scheme and the twelve-year old PROFAFOR carbon-sequestration programme.

Payments for environmental services (PES) are an innovative approach to conservation that has been applied increasingly often in both developed and developing countries. To date, however, few efforts have been made to systematically compare PES experiences.

Payments for environmental services (PES) have attracted increasing interest as a mechanism to translate external, non-market values of the environment into real financial incentives for local actors to provide environmental services (ES). In this introductory paper, we set the stage for the rest of this Special Issue of Ecological Economics by reviewing the main issues arising in PES design and implementation and discussing these in the light of environmental economics. We start with a discussion of PES definition and scope.

Mexico faces both high deforestation and severe water scarcity. The Payment for Hydrological Environmental Services (PSAH) Program was designed to complement other policy responses to the crisis at the interface of these problems. Through the PSAH, the Mexican federal government pays participating forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not currently competitive. Funding comes from fees charged to water users, from which nearly US$18

More than a billion acres have been planted with genetically engineered crops in the USA since 1996, but we do not fully know their ecological costs and benefits.

Your Editorial 'Markets can save forests' (Nature 452, 127

A venture capital company has bought the rights to ecosystem services from a 370,000-hectare rainforest reserve in Guyana. In return for its investment, London-based Canopy Capital will receive a percentage of any income that might one day be made from the reserve's ecosystem services. The company's hope is that these services will eventually become tradable commodities in the same way that carbon is today. Once Canopy Capital has recouped its investment, 80 per cent of further profits will go back to the reserve.

Exclosure experiments have demonstrated the effects of bird predation on arthropods. In a Mexican coffee plantation, we excluded foliage-gleaning bird and bat predators from coffee plants. Effects of bats and birds were additive. In the dry season, birds reduced arthropods in coffee plants by 30%; birds and bats together reduced arthropods by 46%.