Challenges in the Regulation of Payments for Environmental Services: Lessons from São Paulo State, Brazil

Brazil has a deficit of 27 Mha of native vegetation in rural properties and the ambition to restore 12 Mha by 2030 (Nationally Determined Contributions—Paris Agreement), while the state of São Paulo has committed to reforesting 1.5 Mha by 2025. The regulation of payment for environmental services (PES) is a new topic in the Brazilian legal system that also aims to contribute to this commitment. In 2021, a federal law established the national PES policy. For São Paulo state, the current regulation is a decree from 2022. This study analyzes whether the regulation of PES made by São Paulo state conveys all the actions provided for in the federal law, as well as whether there is effective public governance in this state’s regulation. This analysis is essential, since São Paulo regulated this through a decree and not specifically through legislation, which, in theory, reduces public participation and governance. We used an exploratory and deductive method to evaluate whether São Paulo’s regulation adequately reflects federal provisions and governance principles, ensuring the planning and implementation of PES.