Payments for ecosystem services as a road to sustainability? A case of forest dispute in Muonio, Northern Finland

Abstract

Payments for Ecosystem Services (PES) have emerged as new promising governance tools for enhancing sustainable use of natural resources. This article looks at the Muonio forestry dispute where local tourism entrepreneurs and the municipality paid compensations for the Finnish state forestry enterprise to not log in state-owned commercial forests. The case also illustrates some more general challenges with PES. Firstly, paying compensations for somebody not to deteriorate ecosystem services is problematic for environmental and sometimes also social sustainability. Secondly, the valuations on which the Payments are based are often biased. Thirdly, the diffusion of benefits from ecosystem services to actors at various scales is difficult to grasp with monetary estimations. Fourthly, there is a challenge to incorporate future costs and benefits to the valuations. If these challenges are not resolved, PES schemes might blind us from the variety of complexities and equity issues behind the use and governance of ecosystem services.