The Effects of Payments for Environmental Services on Peri-Urban Land Change in Mexico City's Conservation Zone

In many cities of the developing world, informal settlements are a key place for people with low incomes to access housing. Informal urbanization drives land-use change at the urban periphery: settlements may develop on farmland, forests, and wetlands that provide important environmental services for the cities. To protect these peri-urban lands and the environmental services they provide from urban land cover changes, some cities have implemented programs for Payments for Environmental Services (PES) to compensate landholders for land stewardship and conservation. However, little is known about whether and how PES programs mitigate landuse change in contexts with multiple competing land uses and informal land markets, such as in peri-urban zones of the developing world. This research asks: do PES programs mitigate informal urban land-use change in peri-urban contexts, and if so, how?

To answer this question, we conducted a comparative longitudinal study of agrarian communities in Mexico City’s Conservation Zone, comparing land-use change in communities that participate in PES programs with those that do not. Specifically, we used remote sensing, causal inference methods, and semi-structured interviews to examine the impact of PES programs on (1) land-use change over the period of 2000-2015, (2) the rules and norms of land change, and (3) the information, control, and payoffs of the various actors and agencies involved in land-use decisions. We integrated the findings in Ostrom’s Institutional Analysis and Development Framework.

The results suggest that PES programs have had little to no effect on land-use change, nor on rules and norms for land use in both PES-participating communities and non-participating communities in Mexico City’s Conservation Zone. Land-use change has persisted due to the cultural and economic trends of generational change and agricultural abandonment, high opportunity costs, ambiguous authority, and lack of rule enforcement. The most significant effect of these programs on land use was their role (or perceived potential role) in legitimizing land tenure for participating agrarian communities. We draw from Ostrom’s design principles to make recommendations for policies that promote conservation objectives in peri-urban areas, and for future research.