Innovation Subsidy Design and Payments for Ecosystem Services: A Mixed-Methods Approach to Multilateral Environmental Governance
Institutional Design for Innovation and PES
Keywords:
Ecosystem, Climate, Barani, Innovative, BureaucraticAbstract
Unsustainable land use practices are a major contributor to climate change through increased greenhouse gas (GHG) emissions. Payments for Ecosystem Services (PES) offer a promising solution by providing financial incentives to individuals and communities that engage in sustainable natural resource management. In Pakistan, where environmental challenges such as desertification, deforestation, and water scarcity are escalating due to climate change and poor land governance, PES remains underutilized and insufficiently embedded in environmental and agricultural policy frameworks. This study examined the household-level socio-economic and land-use characteristics across four ecological zones of Punjab. The study investigates the potential for innovation subsidy designs under a payment for ecosystem services (PES) framework. Quantitative results show that the PES program significantly increased household income ( = 0.550, p < 0.1) and adoption of sustainable practices ( = 0.310, p < 0.1). While vegetation cover showed a positive trend ( = 0.120$), ecological gains were moderate compared to socio-economic shifts. To ensure long-term success, Pakistan should formally integrate PES into the Climate Change Act through decentralized institutional coordination and timely payment disbursement. The results offer a practical roadmap for scaling up sustainable incentive mechanisms in line with the Pakistan Climate Change Act and Sustainable Development Goals (SDGs). Findings suggest that redesigned subsidies focusing on water-efficient crops and soil regeneration led to improved water use efficiency and increased farm-level incomes. PES initiatives showed moderate ecological improvements but high levels of community engagement and interest.
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The datasets analyzed during the current study are available from the corresponding author upon reasonable request.
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