Assessing the Efficiency of Payment for Ecosystem Services Schemes in South West Nigeria: Evidence from Forest Conservation Pilots

Payment for ecosystem services has emerged as an innovative market-based instrument for incentivising forest conservation and sustainable land management, yet evidence on the efficiency and equity of schemes piloted in Nigeria's South West zone remains limited and methodologically heterogeneous. This study assesses the efficiency and distributional equity of three payment for ecosystem services schemes implemented in Ondo, Ekiti, and Ogun states, focusing on forest conservation and carbon sequestration service provision. Efficiency is assessed using cost-effectiveness analysis comparing payment expenditure against verified forest cover maintenance outcomes measured through satellite-based additionality estimation. Counterfactual deforestation baselines are developed using synthetic control methodology. Equity assessment examines the distribution of payments across socio-economic household categories and the participatory quality of scheme governance as reported by 150 enrolled and 100 non-enrolled household respondents. Additionality estimation indicates that enrolled parcels show significantly lower deforestation rates compared to synthetic controls, confirming positive scheme environmental effectiveness in two of the three schemes. However, cost per tonne of carbon sequestration varies widely across the schemes and exceeds international voluntary market benchmarks in the least efficient case. Payment distribution is significantly skewed toward larger landholding households in two of the three schemes, raising equity concerns. Governance quality is rated as adequate to good by majority respondents in only one scheme. The study recommends adoption of minimum equity standards for payment distribution, independent ecological monitoring, and a standardised additionality assessment protocol for future Nigerian payment for ecosystem services programmes. Keywords: payment for ecosystem services, forest conservation, efficiency assessment, South West Nigeria, additionality.