The need to address sustained economic growth while simultaneously preserving the natural environment presents important policy challenges for countries such as South Africa. Growing concerns about climate change, a loss of biodiversity, and the poor management of natural resources such as forests and water all indicate that the benefits of growth – and its ability to deliver social well-being – must be increasingly considered in light of environmental costs.

Some of the most innovative instruments focused on balancing growth and environmental impact are originating in developing countries. Payment for Ecosystem Services (PES) is one such instrument, used most commonly in Latin America, which is gaining increased traction.

Through the use of monetary and in-kind payments, PES incentivises landowners and communities to maintain intact ecosystems, restore the natural environments of degraded land, and use natural resources sustainably.

In South Africa, PES is considered by a number of stakeholders as having the potential to mitigate climate change, as well as promote sustainable land use and the better management of scarce water resources. PES is also viewed as a way of promoting new livelihoods and generating more sustainable growth. This raises questions as to what a national PES programme in South Africa would look like.