Money (Not) to Burn: Payments for Ecosystem Services to Reduce Crop Residue Burning

B. Kelsey Jack, Seema Jayachandran, Namrata Kala and Rohini Pande

American Economic Review: Insights, 2025, vol. 7, issue 1, 39-55

Abstract: We test whether payments for ecosystem services (PES) can curb the highly polluting practice of crop residue burning in India. Standard PES contracts pay participants after verification that they met a proenvironment condition (clearing fields without burning). We randomize paying a portion of the money up front and unconditionally to address liquidity constraints and farmer distrust, which may undermine the standard contract's effectiveness. Incorporating partial up-front payment into the contract increases compliance by 10 percentage points, which is corroborated by satellite-based burning measurements. The cost per life saved is $3,600–$5,400. The standard PES contract has no effect on burning.

JEL-codes: D86 O13 Q12 Q15 Q18 Q53 Q58 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Money (Not) to Burn: Payments for Ecosystem Services to Reduce Crop Residue Burning (2023)
Working Paper: Money (Not) to Burn: Payments for Ecosystem Services to Reduce Crop Residue Burning (2023)
Working Paper: Money (Not) to Burn: Payments for Ecosystem Services to Reduce Crop Residue Burning (2022)
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DOI: 10.1257/aeri.20230431

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