Financial incentives for ecosystem conservation : a review of the development of markets for environmental services in Sri Lanka

Sri Lanka holds great potential for developing payment for environmental services (PES) and environmental service markets. However, this is a relatively new concept, and improving awareness and building institutional capacity remain a top priority and challenge. This study provides a situation analysis of previous and ongoing projects and initiatives related to PES and environmental service markets, and identifies challenges, constraints and opportunities for future PES projects in Sri Lanka. The study focused primarily on markets associated with the provision of the following environmental services: watershed protection and erosion control; biodiversity conservation (including those associated with eco-tourism and medicinal plants); carbon sequestration; and green agriculture and production.