Cost-Effectiveness of Payments for Ecosystem Services with Dual Goals of Environment and Poverty Alleviation |
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Authors: | Crystal Gauvin Emi Uchida Scott Rozelle Jintao Xu Jinyan Zhan |
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Institution: | (1) Department of Environmental and Natural Resource Economics, Coastal Institute, University of Rhode Island, 1 Greenhouse Road #216, Kingston, RI 02881, USA;(2) Food Security and Environmental Program, Freeman Spogli Institute, Stanford University, 616 Serra Street, Stanford, CA 94305-6055, USA;(3) Department of Environmental Management, Beijing University, Beijing, 100871, China;(4) School of Environment, Beijing Normal University, Beijing, 100875, China; |
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Abstract: | The goal of this article is to understand strategies by which both the environmental and poverty alleviation objectives of
PES programs can be achieved cost effectively. To meet this goal, we first create a conceptual framework to understand the
implications of alternative targeting when policy makers have both environmental and poverty alleviation goals. We then use
the Grain for Green program in China, the largest PES program in the developing world, as a case study. We also use a data set from a survey
that we designed and implemented to evaluate the program. Using the data set we first evaluate what factors determined selection
of program areas for the Grain for Green program. We then demonstrate the heterogeneity of parcels and households and examine the correlations across households and
their parcels in terms of their potential environmental benefits, opportunity costs of participating, and the asset levels
of households as an indicator of poverty. Finally, we compare five alternative targeting criteria and simulate their performance
in terms of cost effectiveness in meeting both the environmental and poverty alleviation goals when given a fixed budget.
Based on our simulations, we find that there is a substantial gain in the cost effectiveness of the program by targeting parcels
based on the “gold standard,” i.e., targeting parcels with low opportunity cost and high environmental benefit managed by
poorer households. |
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