Only one tree from each seed? Environmental effectiveness and poverty alleviation in Mexico’s payments for ecosystem services program

Environmental conditional cash transfers have gained popularity, yet their true effects remain elusive. This article delves into the land cover and wealth impacts of a federal program aimed at incentivizing landowners to preserve forests. Leveraging panel data encompassing both program beneficiaries and rejected applicants, the study meticulously controls for fixed differences and time trends affecting both groups. The findings reveal that the program significantly curtails expected land cover loss by 40-51 percent while concurrently contributing to modest poverty alleviation. Notably, environmental gains are more pronounced in regions with lower poverty levels, whereas household benefits are amplified in areas with reduced deforestation risk. These results underscore the intricate challenge of harmonizing diverse policy objectives through a singular intervention.