EconPapers    
Economics at your fingertips  
 

Spatial targeting of payments for environmental services: A tool for boosting conservation benefits

Tobias Wünscher, Stefanie Engel and Sven Wunder

Ecological Economics, 2008, vol. 65, issue 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 an applied 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.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (51) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0921-8009(07)00568-X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:65:y:2008:i:4:p:822-833

Access Statistics for this article

Ecological Economics is currently edited by C. J. Cleveland

More articles in Ecological Economics from Elsevier
Series data maintained by Dana Niculescu ().

 
Page updated 2017-09-29
Handle: RePEc:eee:ecolec:v:65:y:2008:i:4:p:822-833