Conditionalities for payments

Conditionality in REDD+ programmes refers to the idea that payments are disbursed to recipients based on their performance in achieving REDD+ goals. This results-based approach is gaining traction among REDD+ programmes and is particularly appealing to donors as development budgets contract. While conditionality is often a lauded feature of REDD +, there is ongoing debate over whether conditionality is always required for achieving programme objectives.

For example, conditional cash transfers can be more effective than unconditional cash transfers, though the latter are more equitable, but payment schemes not based on conditions can still be effective if they are perceived as equitable. Furthermore, unconditional cash transfers are also viewed as more equitable than conditional cash transfers. Finally, there are also efficiency implications to consider as more defined conditionality criteria to increase effectiveness or more complex eligibility criteria to ensure equity outcomes will entail higher costs to implement and to monitor (Loft et al. 2019).

The design of a payment scheme affects beneficiaries’ perceptions of effort and equity. There is some support for the idea that conditionality leads to better outcomes. An experiment assessing individual perceptions of conservation efforts and community-level equity under four different PES designs across eight villages in north-western Vietnam found that two types of conditional payments – those based on compensation only, and those based on the actual provision of ecosystem services – led to slightly higher environmental effectiveness than unconditional, differentiated payments. A design with differentiated payments conditional only on individuals’ contributions of effort was perceived as being the most equitable, and more effective than other designs in motivating conservation efforts. Meanwhile, conservation effort under unconditional, undifferentiated payments (egalitarian payments) was perceived as not being significantly different from under any of the other designs. Overall, this supports the idea that PES design equity and effectiveness are affected by the differentiation and conditionality of payments, with conditional payments being slightly being more effective and viewed as more equitable than unconditional payments. More promisingly, it suggests that equitable and effective PES designs can coincide (Loft et al. 2019[1]).


[1] Loft, L., Gehrig, S., Le, D.N., Rommel, J., 2019. Effectiveness and equity of Payments for Ecosystem Services: Real-effort experiments with Vietnamese land users. Land Use Policy 86, 218–228.