The use of markets and payments for environmental services is a topic gaining interest among policy-makers and practitioners worldwide. In the developing world, Costa Rica has led efforts to experiment with the application of these mechanisms. This paper examines the literature regarding the Costa Rica experience to see what we are learning – how technical, scientific and economic information on environmental services has fed into these initiatives, and to what extent these experiences are being monitored and evaluated. The principal objective of the literature review is to identify and review material that addresses inter alia the local origins and development of the concept of payments and markets for environmental services, the types of existing initiatives and who is participating in them, the knowledge base underpinning market development, the monitoring and evaluation of the initiatives to date and to what extent the literature assesses these initiatives in terms of economic efficiency, environmental effectiveness, and social equity and/or poverty reduction.
