The impact of payments for ecosystem services on crop burning in India

Transitioning from subsistence agriculture to commercial growing can come at a high cost to the environment. Mechanized rice paddy harvesting has increased farmer profits in India but also led to widespread burning of crop residue (stubble) to clear fields after harvest, creating massive air quality problems across northern India. Addressing stubble burning is a high-priority item on India’s central government’s political agenda. One policy approach to reduce stubble burning is to provide payments for ecosystem services (PES), in which individuals are paid to refrain from environmentally damaging behavior. PES programs provide farmers with flexibility in how they manage their crop residue: for example, farmers can rent crop residue management (CRM) equipment and the PES payment would defray the costs, but farmers can also remove and bale the stubble. While PES has been implemented widely, there is limited evidence on the causal effect of PES programs. Can providing PES to farmers on the condition that they not burn their paddies reduce stubble burning?