The Impact of Payments for Reforestation in the Mexican State Michoacán

Elsa Maria Cardona Santos, Daniel Kyalo Willy and Karin Holm-Müller

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: As a means to adapt to climate change, the Mexican government grants, since 2003, payments as an incentive for landholders to conserve, maintain and increase the provision of environmental services through the promotion of a forestry strategy. This paper contributes to the literature with an empirical analysis of the impact of payments for reforestation in one of the states with the highest rates of deforestation, Michoac n. The impact is estimated by means of panel data regressions and propensity score matching. Our results suggest that the payments are not contributing to the overall reforestation in Michoac n because of the existence of leakage in areas that are not participating in the program. Our analysis underlines the challenges faced when implementing financial incentive based programs and provides policy makers with evidence for improving the design of such programs.

JEL-codes: C87 Q23 Q38 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:113036

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