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Spatial targeting of payments for environmental services: a tool for boosting conservation benefits
Wünscher, T., Engel, S. and Wunder, S.
Ecological Economics 65 (4): 822-833.
Abstract
Payments for environmental services (PES) have become an increasingly popular
market-based instrument to translate external, non-market environmental services
into financial incentives for landowners to preserve the ecosystems that provide
the services. However, lack of spatial differentiation in the targeting
mechanism may lead to efficiency losses. Addressing this challenge, we construct
a formal site selection tool, which takes into account three variables that vary
in space: environmental services provided, risks of losing those services, and
participation costs. Using data from Costa Rica’s Nicoya Peninsula, we
empirically test the tool’s potential to increase the financial efficiency of
the forest-focused PES program in place. Results show that, given a fixed
budget, efficiency increases radically if per hectare payments are aligned to
landowners’ heterogeneity in participation costs, involving opportunity,
transaction and direct costs of protection, respectively. Selecting sites based
on environmental service potential also moderately increases efficiency. Overall
additionality could in the best case be doubled, but remains generally limited
due to current low deforestation risks prevailing in Costa Rica. To take
advantage of the high efficiency potentials of flexible payments, we propose
inverse auction systems as a cost-effective approach for the determination of
micro-level participation costs.
Keywords: Conservation, spatial analysis, environmental services, targeting,
Costa Rica.
Note: For further information about this publications, please contact
the corresponding author, Dr. Sven Wunder (s.wunder@cgiar.org)
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En español
