Mexico’s PES-Carbon Programme: A preliminary assessment and impacts on rural livelihoods

Mexico’s carbon payments programme was established in 2004 as a component of a wider programme of Payments for Carbon, Biodiversity and Agroforestry Services (PSA-CABSA) which aims to provide financial incentives to rural communities and private landowners for the design and implementation of carbon sequestration, biodiversity conservation and agroforestry projects (Corbera 2005). PSA-CABSA complemented a programme of Payments for Watershed Services (PSA-H), which was established in 2003 (Alix-Garcia et al. 2005). In 2006, both PSA-CABSA and PSA-H were merged into a single policy framework of Payments for Environmental Services, with each sub-programme (hydrological, biodiversity, carbon and agroforestry services) maintaining its own procedural rules.2 During the first two years of PSA-CABSA, the Mexican Government was the only buyer of carbon offsets, and funded rural communities and private landowners to develop projects with the technical support of consultants and civil organizations. However, government and service providers’ rights and duties have changed over time due to ongoing procedural learning and variable levels of public funding. This chapter examines the design and performance of Mexico’s PSA-CABSA programme, with an emphasis on its carbon component. Methodologically, it relies on secondary literature and interviews with key stakeholders, including government officials, consultants and community leaders, conducted over two research periods (January–April 2007 and October–November 2008). The second section examines the design of PSA-CABSA and the rules for carbon payments, paying attention to the design process, geographical coverage, actors’ rights and responsibilities, level of compliance, sanctions and the price-setting mechanism for carbon offsets.