Impact of payments for environmental services and protected areas on local livelihoods and forest conservation in northern Cambodia

The potential impacts of payments for environmental services (PES) and protected areas (PAs) on environmental outcomes and local livelihoods in developing countries are contentious and have been widely debated. The available evidence is sparse, with few rigorous evaluations of the environmental and social impacts of PAs and particularly of PES. We measured the impacts on forests and human well‐being of three different PES programs instituted within two PAs in northern Cambodia, using a panel of intervention villages and matched controls. Both PES and PAs delivered additional environmental outcomes relative to the counterfactual: reducing deforestation rates significantly relative to controls. PAs increased security of access to land and forest resources for local households, benefiting forest resource users but restricting households’ ability to expand and diversify their agriculture. The impacts of PES on household well‐being were related to the magnitude of the payments provided. The two higher paying market‐linked PES programs had significant positive impacts, whereas a lower paying program that targeted biodiversity protection had no detectable effect on livelihoods, despite its positive environmental outcomes. Households that signed up for the higher paying PES programs, however, typically needed more capital assets; hence, they were less poor and more food secure than other villagers. Therefore, whereas the impacts of PAs on household well‐being were limited overall and varied between livelihood strategies, the PES programs had significant positive impacts on livelihoods for those that could afford to participate. Our results are consistent with theories that PES, when designed appropriately, can be a powerful new tool for delivering conservation goals whilst benefiting local people.     

Combining Auctions and Performance‐Based Payments in a Forest Enrichment Field Trial in Western Kenya

Cost‐effectiveness is an important aspect in the assessment of payments for environmental services (PES) initiatives. In participatory field trials with communities in Western Kenya, we combined procurement auctions for forest enrichment contracts with performance‐based payments and compared the outcomes with a baseline scenario currently used by the Kenyan Forest Service. Procurement auctions were the most cost‐effective. The competitive nature of the auction reduced contracting expenses (provision costs), and the result‐oriented payments provided additional incentives to care for the planted seedlings, resulting in their improved survival rates (service quantity). These gains clearly exceeded increases in transaction costs associated with conducting an auction. The number of income‐poor auction participants and winners was disproportionately high and local institutional buy‐in was remarkably strong. Our participatory approach may, however, require adaptations when conducted at a larger scale. Although the number of contracts we monitored was limited and prohibited the use of statistical tests, our study is one of the first to reveal the benefits of using auctions for PES in developing countries. Combinando Subastas y Pagos Basados en Desempeño en un Ensayo de Campo de Enriquecimiento de Bosques en el Oeste de Kenia     

Meta-analysis of landowner participation in voluntary incentive programs for provision of forest ecosystem services

Many voluntary incentive programs for provision of forest ecosystem services (ES) have low participation rates, insufficient enrollment areas, and inefficient ecological outcomes. Understanding participation behavior in such programs has therefore become a crucial part of policy success. We synthesized a large body of literature on the behavior of nonindustrial private forest owners based on surveys of stated (intended) participation or data on actual participation in existing or hypothetical programs. Using metaregression analysis, we examined how methodological, program-characteristic, and economic-incentive variables affected participation rate estimates. Participation rates tended to be overestimated when landowner participation was elicited in hypothetical choice situations (compared with real situations) and when dichotomous choice surveys (compared with census data) were used. The marginal effect sizes were quite large, for example, a 31% increase with use of stated choices in hypothetical scenarios, and practitioners should therefore be aware of them. However, use of choice experiment surveys in a modified scenario based on existing programs had no effect on participation when all other determinants were controlled for. Participation rates decreased significantly as length of the contract increased and when there was no withdrawal option. These results suggest that perpetual contracts have a lower negative impact on participation than time-limited contracts with a duration of over 50 years. We confirmed that as compensation amounts increased, participation increased. One-time up-front payments were more effective in increasing initial participation than annual payments for contracts of over 5 years. We identified the robust determinants and the effect sizes of those determinants on landowner participation rate estimates, thereby contributing to a better understanding of forest owner behavior and offering useful insights to enable researchers and resource managers to improve the design and efficiency of new and existing forest ES programs.     

Parks versus PES: Evaluating direct and incentive-based land conservation in Mexico

Protected areas (PAs) and payments for ecosystem services (PES) are the top two mechanisms available for countries to achieve international REDD agreements, yet there are few empirical comparisons of their effects. We estimate the impacts of PAs and PES on forest conservation, poverty reduction, and population change at the locality level in Mexico in the 2000s. Both policies conserved forest, generating an approximately 20–25% reduction in expected forest cover loss. PES created statistically significant but small poverty alleviation while PAs had overall neutral impacts on livelihoods. Estimates by individual policy type for the same level of deforestation risk indicate that biosphere reserves and PES balanced conservation and livelihood goals better than strict protected areas or mixed-use areas. This suggests that both direct and incentive-based instruments can be effective, and that policies combining sustainable financing, flexible zoning, and recognition of local economic goals are more likely to achieve conservation without harming livelihoods.     

Synergies and trade-offs among integrated conservation approaches in Mexico

Integrated conservation approaches (ICAs) are employed by governments, communities, and nongovernmental organizations worldwide seeking to achieve outcomes with dual benefits for biodiversity conservation and poverty alleviation. Although ICAs are frequently implemented concurrently, interactions among ICAs and the synergies or trade-offs that result are rarely considered during program design, implementation, and evaluation. In support of more deliberate and effective use of ICAs, we examined interactions among four well-known strategies: biosphere reserves (BRs), voluntary protected areas (VPAs), payments for ecosystem services (PES), and community forest management (CFM). Through a comparative case study, we analyzed interactions among spatially or temporally clustered ICAs implemented on communally held and managed lands in three ecologically and socioeconomically distinct regions of Mexico. Our research methods combined policy analysis with data gathered through participant observation and semistructured interviews (n = 78) and focus groups (n = 5) with government officials, implementers, and participants involved in ICAs in 28 communities. Despite the significant differences among the regions in which they were implemented, we found that key actors at each level of involvement generally perceived interactions among ICAs as synergistic. The PES programs were perceived to strengthen protected areas by reducing forest cover loss in and around BRs, fostering proconservation attitudes, and incentivizing the establishment of VPAs. Communities that invested PES income in CFM were motivated to conserve forests beyond the duration of PES programs, and CFM in buffer zones was perceived to strengthen BRs by maintaining forest cover and generating income for communities. We also identified key social and environmental factors that can influence these interaction effects among ICAs. Based on these findings, we recommend further study of ICA interactions and intentionally complementary policy design to maximize positive environmental and social outcomes.     

Trends in biodiversity and habitat quantification tools used for market-based conservation in the United States

Market-based conservation mechanisms are designed to facilitate the mitigation of harm to and conservation of habitats and biodiversity. Their potential is partly hindered, however, by the quantification tools used to assess habitat quality and functionality. Of specific concern are the lack of transparency and standardization in tool development and gaps in tool availability. To address these issues, we collected information via internet and literature searchers and through conversations with tool developers and users on tools used in U.S. conservation mechanisms, such as payments for ecosystem services (PES) and ecolabel programs, conservation banking, and habitat exchanges. We summarized information about tools and explored trends among and within mechanisms based on criteria detailing geographic, ecological, and technical features of tools. We identified 69 tools that assessed at least 34 species and 39 habitat types. Where tools reported pricing, 98% were freely available. More tools were applied to states along the U.S. West Coast than elsewhere, and the level of tool transferability varied markedly among mechanisms. Tools most often incorporated conditions at numerous spatial scales, frequently addressed multiple risks to site viability, and required 1–83 data inputs. Most tools required a moderate or greater level of user skill. Average tool-complexity estimates were similar among all mechanisms except PES programs. Our results illustrate the diversity among tools in their ecological features, data needs, and geographic application, supporting concerns about a lack of standardization. However, consistency among tools in user skill requirements, incorporation of multiple spatial scales, and complexity highlight important commonalities that could serve as a starting point for establishing more standardized tool development and feature-incorporation processes. Greater standardization in tool design may expand market participation and facilitate a needed assessment of the effectiveness of market-based conservation.     

Evaluating the potential of biodiversity offsets to achieve net gain

Evaluating the outcomes and tracking the trajectory of biodiversity offsets is essential to demonstrating their effectiveness as a mechanism to conciliate development and conservation. We reviewed the literature to determine the principles that should underpin biodiversity offset planning and the criteria for offset evaluation at the project level. According to the literature, the core principles of equivalence, additionality, and permanence are used as criteria to evaluate conservation outcomes of offsets. We applied the criteria to evaluate offsets of a large iron ore mining project in the Atlantic Forest in Brazil. We examined equivalence in terms of the amount of area per biodiversity value affected and fauna and flora similarity, additionality in terms of landscape connectivity, and permanence in terms of guarantees to ensure protection and restoration offsets lasting outcomes. We found an offset ratio (amount of affected area:offset area) of 1:1.8 for forests and 1:2 for grasslands. Ecological equivalence (i.e., similarity between affected and offset areas) was found for forested areas, but not for ferruginous rupestrian grasslands or for fauna. Landscape metrics showed that connectivity improved relative to the preproject situation as a result of locating restoration offsets in the largest and best-connected forest patch. Permanence of offsets was addressed by establishing covenants and management measures, but financial guarantees to cover maintenance costs after mine closure were lacking. Offsets should be equivalent in type and size, provide conservation outcomes that would not be obtained without them (additionality), and be lasting (permanence). To monitor and evaluate offsets, it is necessary to determine how well these 3 principles are applied in the planning, implementation, and maintenance of offsets. Achieving measurable conservation outcomes from offsets is a long-term endeavor that requires sustained management support, and is information intensive. Thus, offsets require ongoing monitoring and evaluation as well as adaptive management.     

Cost shifting and other perverse incentives in biodiversity offsetting in India

Biodiversity offsetting aims to compensate for development‐induced biodiversity loss through commensurate conservation gains and is gaining traction among governments and businesses. However, cost shifting (i.e., diversion of offset funds to other conservation programs) and other perverse incentives can undermine the effectiveness of biodiversity offsetting. Additionality—the requirement that biodiversity offsets result in conservation outcomes that would not have been achieved otherwise—is fundamental to biodiversity offsetting. Cost shifting and violation of additionality can go hand in hand. India's national offsetting program is a case in point. Recent legislation allows the diversion of offset funds to meet the country's preexisting commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity (CBD). With such diversions, no additional conservation takes place and development impacts remain uncompensated. Temporary additionality cannot be conceded in light of paucity of funds for preexisting commitments unless there is open acknowledgement that fulfillment of such commitments is contingent on offset funds. Two other examples of perverse incentives related to offsetting in India are the touting of inherently neutral offsetting outcomes as conservation gains, a tactic that breeds false complacency and results in reduced incentive for additional conservation efforts, and the clearing of native vegetation for commercial plantations in the name of compensatory afforestation, a practice that leads to biodiversity decline. The risks accompanying cost shifting and other perverse incentives, if not preempted and addressed, will result in net loss of forest cover in India. We recommend accurate baselines, transparent accounting, and open reporting of offset outcomes to ensure biodiversity offsetting achieves adequate and additional compensation for impacts of development.     

The principal–agent model with multilateral externalities: An application to climate agreements

We consider contracting of a principal with an agent if multilateral externalities are present. The motivating example is that of an international climate agreement given private information about the willingness-to-pay (WTP) for emissions abatement. Due to multilateral externalities the principal uses her own emissions besides subsidies to incentivize the agent and to assure his participation. Optimal contracts equalize marginal abatement costs and, thus, can be implemented by a system of competitive permit trading. Moreover, optimal contracts can include a boundary part (i.e., the endogenous, type dependent participation constraint is binding), which is not a copy of the outside option of no contract. Compared to this outside option, a contract can increase emissions of the principal for types with a low WTP, and reduce her payoff for high types. Subsidies can be constant or even decreasing in emission reductions, and turn negative so that the agent reduces emissions and pays the principal.     

Co-benefits and additionality of the clean development mechanism: An empirical analysis

The Clean Development Mechanism (CDM) allows industrialized countries to comply with the Kyoto Protocol by using carbon offsets from developing countries. There are two puzzles within this carbon market: additionality (the proposed activity would not have occurred in its absence) and co-benefits (the project has other environmental benefits besides climate mitigation). This paper proposes an econometric approach to evaluate the CDM effect on sulfur dioxide emission reductions and assess its additionality indirectly. Our empirical model is applied to China's emissions at the prefecture level. We found that the CDM does not have a statistically significant effect in lowering sulfur dioxide emissions. This result casts doubt on additionality of these CDM activities, that is, they would have happened anyway.     

An assessment of adherence to basic ecological principles by payments for ecosystem service projects

Programs and projects employing payments for ecosystem service (PES) interventions achieve their objectives by linking buyers and sellers of ecosystem services. Although PES projects are popular conservation and development interventions, little is known about their adherence to basic ecological principles. We conducted a quantitative assessment of the degree to which a global set of PES projects adhered to four ecological principles that are basic scientific considerations for any project focused on ecosystem management: collection of baseline data, identification of threats to an ecosystem service, monitoring, and attention to ecosystem dynamics or the formation of an adaptive management plan. We evaluated 118 PES projects in three markets—biodiversity, carbon, and water—compiled using websites of major conservation organizations; ecology, economic, and climate‐change databases; and three scholarly databases (ISI Web of Knowledge, Web of Science, and Google Scholar). To assess adherence to ecological principles, we constructed two scientific indices (one additive [ASI] and one multiplicative [MSI]) based on our four ecological criteria and analyzed index scores by relevant project characteristics (e.g., sector, buyer, seller). Carbon‐sector projects had higher ASI values (P < 0.05) than water‐sector projects and marginally higher ASI scores (P < 0.1) than biodiversity‐sector projects, demonstrating their greater adherence to ecological principles. Projects financed by public–private partnerships had significantly higher ASI values than projects financed by governments (P < 0.05) and marginally higher ASI values than those funded by private entities (P < 0.1). We did not detect differences in adherence to ecological principles based on the inclusion of cobenefits, the spatial extent of a project, or the size of a project's budget. These findings suggest, at this critical phase in the rapid growth of PES projects, that fundamental ecological principles should be considered more carefully in PES project design and implementation in an effort to ensure PES project viability and sustainability.     

Impact of a Community‐Based Payment for Environmental Services Intervention on Forest Use in Menabe,Madagascar

Abstract: Despite the growing interest in conservation approaches that include payments for environmental services (PES), few evaluations of the influence of such interventions on behaviors of individuals have been conducted. We used self‐reported changes in six legal and illegal forest‐use behaviors to investigate the way in which a PES for biodiversity conservation intervention in Menabe, Madagascar, influenced behavior. Individuals (n =864) from eight intervention communities and five control communities answered questions on their forest‐use behaviors before and after the intervention began, as well as on their reasons for changing and their attitudes to various institutions. The payments had little impact on individuals’ reported decisions to change behaviors, but it had a strong impact on individuals’ attitudes. Payments appeared to legitimize monitoring of behaviors by the implementing nongovernmental organization (NGO), but did not act as a behavioral driver in their own right. Although there were no clear differences between changes in behaviors in the intervention and control communities, the intervention did influence motivations for change. Fear of local forest associations and the implementing NGO were strong motivators for changing behavior in communities with the PES intervention, whereas fear of the national government was the main reason given for change in control communities. Behavioral changes were most stable where fear of local organizations motivated the change. Our results highlight the interactions between different incentives people face when making behavioral decisions and the importance of considering the full range of incentives when designing community‐based PES interventions.     

Effects of payments for ecosystem services on wildlife habitat recovery

Conflicts between local people's livelihoods and conservation have led to many unsuccessful conservation efforts and have stimulated debates on policies that might simultaneously promote sustainable management of protected areas and improve the living conditions of local people. Many government‐sponsored payments‐for‐ecosystem‐services (PES) schemes have been implemented around the world. However, few empirical assessments of their effectiveness have been conducted, and even fewer assessments have directly measured their effects on ecosystem services. We conducted an empirical and spatially explicit assessment of the conservation effectiveness of one of the world's largest PES programs through the use of a long‐term empirical data set, a satellite‐based habitat model, and spatial autoregressive analyses on direct measures of change in an ecosystem service (i.e., the provision of wildlife species habitat). Giant panda (Ailuropoda melanoleuca) habitat improved in Wolong Nature Reserve of China after the implementation of the Natural Forest Conservation Program. The improvement was more pronounced in areas monitored by local residents than those monitored by the local government, but only when a higher payment was provided. Our results suggest that the effectiveness of a PES program depends on who receives the payment and on whether the payment provides sufficient incentives. As engagement of local residents has not been incorporated in many conservation strategies elsewhere in China or around the world, our results also suggest that using an incentive‐based strategy as a complement to command‐and‐control, community‐ and norm‐based strategies may help achieve greater conservation effectiveness and provide a potential solution for the park versus people conflict.     

Green payments and dual policy goals

We use a mechanism design framework to analyze the optimal design of green payment policies with the dual goals of conservation and income support for small farms. Each farm is characterized by two dimensions of attributes: farms size and conservation efficiency. The policymaker may not be able to use the attributes as an explicit criterion for payments. We characterize optimal policy when conservation efficiency is unobservable to policymakers, and when farm size is also unobservable. An income support goal is shown to reduce the conservation distortion caused by asymmetric information. The cost of optimal green payment mechanisms is shown to depend crucially on whether large or small farms have greater conservation efficiency.     

Green payments and dual policy goals

We use a mechanism design framework to analyze the optimal design of green payment policies with the dual goals of conservation and income support for small farms. Each farm is characterized by two dimensions of attributes: farms size and conservation efficiency. The policymaker may not be able to use the attributes as an explicit criterion for payments. We characterize optimal policy when conservation efficiency is unobservable to policymakers, and when farm size is also unobservable. An income support goal is shown to reduce the conservation distortion caused by asymmetric information. The cost of optimal green payment mechanisms is shown to depend crucially on whether large or small farms have greater conservation efficiency.     

Costa Rica's Payment for Environmental Services Program: Intention, Implementation, and Impact

Abstract:  We evaluated the intention, implementation, and impact of Costa Rica's program of payments for environmental services (PSA), which was established in the late 1990s. Payments are given to private landowners who own land in forest areas in recognition of the ecosystem services their land provides. To characterize the distribution of PSA in Costa Rica, we combined remote sensing with geographic information system databases and then used econometrics to explore the impacts of payments on deforestation. Payments were distributed broadly across ecological and socioeconomic gradients, but the 1997–2000 deforestation rate was not significantly lower in areas that received payments. Other successful Costa Rican conservation policies, including those prior to the PSA program, may explain the current reduction in deforestation rates. The PSA program is a major advance in the global institutionalization of ecosystem investments because few, if any, other countries have such a conservation history and because much can be learned from Costa Rica's experiences.     

Enhancing Conservation,Ecosystem Services,and Local Livelihoods through a Wildlife Premium Mechanism

We propose the wildlife premium mechanism as an innovation to conserve endangered large vertebrates. The performance‐based payment scheme would allow stakeholders in lower‐income countries to generate revenue by recovering and maintaining threatened fauna that can also serve as umbrella species (i.e., species whose protection benefits other species with which they co‐occur). There are 3 possible options for applying the premium: option 1, embed premiums in a carbon payment; option 2, link premiums to a related carbon payment, but as independent and legally separate transactions; option 3, link premiums to noncarbon payments for conserving ecosystem services (PES). Each option presents advantages, such as incentive payments to improve livelihoods of rural poor who reside in or near areas harboring umbrella species, and challenges, such as the establishment of a subnational carbon credit scheme. In Kenya, Peru, and Nepal pilot premium projects are now underway or being finalized that largely follow option 1. The Kasigau (Kenya) project is the first voluntary carbon credit project to win approval from the 2 leading groups sanctioning such protocols and has already sold carbon credits totaling over $1.2 million since June 2011. A portion of the earnings is divided among community landowners and projects that support community members and has added over 350 jobs to the local economy. All 3 projects involve extensive community management because they occur on lands where locals hold the title or have a long‐term lease from the government. The monitoring, reporting, and verification required to make premium payments credible to investors include transparent methods for collecting data on key indices by trained community members and verification of their reporting by a biologist. A wildlife premium readiness fund would enable expansion of pilot programs needed to test options beyond those presented here. Mejora de la Conservación, Servicios del Ecosistema y Calidad de Vida Local Mediante un Mecanismo de Compensación de Vida Silvestre     

Global Habitat Protection: Limitations of Development Interventions and a Role for Conservation Performance Payments

Abstract: Conservation biologists, policy makers, and citizens have identified the protection of native ecosystems in low-income nations as a global social objective. Among the more popular initiatives toward this objective is the use of development interventions in the peripheral areas of endangered ecosystems. Such interventions indirectly provide desirable ecosystem services by redirecting labor and capital away from activities that degrade ecosystems (e.g., agricultural intensification) and by encouraging commercial activities that supply ecosystem services as joint products (e.g., ecotourism). I examined the economics of such interventions and the available empirical evidence and concluded that development interventions are hindered by (1) the indirect and ambiguous conservation incentives that they generate, (2) the complexity of their implementation, and (3) their lack of conformity with the temporal and spatial dimensions of ecosystem conservation objectives. In contrast, paying individuals or communities directly for conservation performance may be a simpler and more effective approach. In recent years there has been widespread experimentation with contracting approaches to ecosystem conservation. Conservation contracting can (1) reduce the set of critical parameters that practitioners must affect to achieve conservation goals, (2) permit more precise targeting and more rapid adaptation over time, and (3) strengthen the links between individual well-being, individual actions, and habitat conservation, thus creating a local stake in ecosystem protection. In situations where performance payments are unlikely to work, indirect development interventions are also unlikely to work. Thus, despite the potential barriers to developing a system of conservation contracts in low-income nations, my analysis suggests that performance payments have the potential to improve the way in which ecosystems are conserved in these nations.     

Mechanisms and impacts of an incentive-based conservation program with evidence from a randomized control trial

Conservation science needs more high-quality impact evaluations, especially ones that explore mechanisms of success or failure. Randomized control trials (RCTs) provide particularly robust evidence of the effectiveness of interventions (although they have been criticized as reductionist and unable to provide insights into mechanisms), but there have been few such experiments investigating conservation at the landscape scale. We explored the impact of Watershared, an incentive-based conservation program in the Bolivian Andes, with one of the few RCTs of landscape-scale conservation in existence. There is strong interest in such incentive-based conservation approaches as some argue they can avoid negative social impacts sometimes associated with protected areas. We focused on social and environmental outcomes based on responses from a household survey in 129 communities randomly allocated to control or treatment (conducted both at the baseline in 2010 and repeated in 2015–2016). We controlled for incomplete program uptake by combining standard RCT analysis with matching methods and investigated mechanisms by exploring intermediate and ultimate outcomes according to the underlying theory of change. Previous analyses, focused on single biophysical outcomes, showed that over its first 5 years Watershared did not slow deforestation or improve water quality at the landscape scale. We found that Watershared influenced some outcomes measured using the survey, but the effects were complex, and some were unexpected. We thus demonstrated how RCTs can provide insights into the pathways of impact, as well as whether an intervention has impact. This paper, one of the first registered reports in conservation science, demonstrates how preregistration can help make complex research designs more transparent, avoid cherry picking, and reduce publication bias.     

Untangling outcomes of de jure and de facto community‐based management of natural resources

We systematically reviewed the literature on the tragedy of the commons and common‐property resources. We segregated studies by legal management regimes (de jure regimes) and management that develops in practice (de facto regimes) to understand how the structure of regime formation affects the outcome of community management on sustainability of resource use. De facto regimes, developed within the community, are more likely to have positive impacts on the resource. However, de facto regimes are fragile and not resilient in the face of increased population pressure and unregulated markets, and de facto management regimes are less successful where physical exclusion of external agents from resources is more difficult. Yet, formalization or imposition of de jure management regimes can have complicated impacts on sustainability. The imposition of de jure regimes usually has a negative outcome when existing de facto regimes operate at larger scales than the imposed de jure regime. In contrast, de jure regimes have largely positive impacts when the de facto regimes operate at scales smaller than the overlying de jure regimes. Formalization may also be counterproductive because of elite capture and the resulting de facto privatization (that allows elites to effectively exclude others) or de facto open access (where the disenfranchised may resort to theft and elites cannot effectively exclude them). This underscores that although the global movement to formalize community‐management regimes may address some forms of inequity and may produce better outcomes, it does not ensure resource sustainability and may lead to greater marginalization of users. Comparison of governance systems that differentiate between initiatives that legitimize existing de facto regimes and systems that create new de facto regimes, investigations of new top‐down de jure regimes, and studies that further examine different approaches to changing de jure regimes to de facto regimes are avenues for further inquiry.