Abstract
Based on two case studies conducted at local sites in Northern Thailand and Lao PDR, the objectives of this paper are (i) to assess whether conditions for the establishment of PES at the watershed level exist in the uplands of mainland SE Asia and (ii) to examine and discuss limitations that are likely to impinge on direct transfer of the PES concept as well as the institutional adaptations and support that are required for the successful implementation of PES markets in this regional context. The study's main findings are that: (i) acceptance of PES principles and constraints are directly related to stakeholders' perception of their land rights irrespective of their actual rights; (ii) willingness to pay (WTP) is very low among local stakeholders, making any PES market unlikely to emerge without external support; (iii) the classical scheme for watershed services hardly applies in its original form because environmental service (ES) providers and buyers are generally the same people; (iv) where potential ES buyers feel that ES providers are better-off or wealthier than them, they do not have any WTP for ES; (v) good governance, including a strong liaising at various levels between people and the authorities is a strong prerequisite for the successful establishment of PES markets, even without direct government funding