This dissertation investigates how a market-based mechanism for water and biodiversity conservation generates value from ecosystem services, rendering them as a recognizable commodity to be exchanged in a market. Through a case study of a watershed payments for ecosystem services (PES) scheme in Ecuador called Fondo del Agua (FONAG), I examine the social constitution of value, and ask how changes in labor restructure socio-spatial relations, produce new territories, and modify how communities use their environment. This dissertation follows the interconnections FONAG has forged between the city and the countryside, particularly at the perceived sites of ecosystem service production. I employ participant observation, key informant interviews, walking tours of FONAG's intervention sites, and key document collection to analyze the function of FONAG and its project design, community enrollment, and project implementation. I demonstrate how FONAG targets local land use and labor arrangements to implement the PES scheme, and argue that PES arrangements necessarily invoke new forms of territorialization focused upon geographically grounded ecosystem services. The combination of labor and territorial processes co-produces value within PES programs by providing a proxy for an otherwise ficticious commodity. This dissertation advances literature in environmental governance and political ecology by addressing the existing gap on the labor processes entailed in producing value from newly defined commodities. It contributes to academic debates surrounding market-based and multi-partner governance through critical analysis of socio-spatial processes attending labor reconfiguration, and it provides data on an increasingly popular model of environmental governance.
