Paying for the hydrological services of Mexico's forests: Analysis, negotiations and results

doi:10.1016/J.ECOLECON.2007.07.031

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Paying for the hydrological services of Mexico's forests: Analysis, negotiations and results

Journal Article•DOI•

Paying for the hydrological services of Mexico's forests: Analysis, negotiations and results

Carlos Muñoz-Piña, Alejandro Guevara¹, Juan Manuel Torres², Josefina Braña•Institutions (2)

Universidad Iberoamericana Ciudad de México¹, Centro de Investigación y Docencia Económicas²

01 May 2008-Ecological Economics (Elsevier)-Vol. 65, Iss: 4, pp 725-736

TL;DR: The Payment for Hydrological Environmental Services (PSAH) Program as mentioned in this paper was designed to complement other policy responses to the crisis at the interface of these problems, where the Mexican federal government pays participating forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not currently competitive.

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About: This article is published in Ecological Economics.The article was published on 2008-05-01. It has received 571 citations till now. The article focuses on the topics: Water scarcity & Watershed management.

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Journal Article•DOI•

Designing payments for environmental services in theory and practice: An overview of the issues

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Stefanie Engel¹, Stefano Pagiola², Sven Wunder³•Institutions (3)

ETH Zurich¹, World Bank², Center for International Forestry Research³

01 May 2008-Ecological Economics

TL;DR: Payments for environmental services (PES) have attracted increasing interest as a mechanism to translate external, non-market values of the environment into real financial incentives for local actors to provide environmental services as mentioned in this paper.

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2,130 citations

Cites background from "Paying for the hydrological service..."

...The PSAH program aims to preserve water supplies and is financed from a portion of the revenue generated from water use fees (Muñoz-Piña et al., 2008-this issue)....
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...Paying for the hydrological services of Mexico's forests: analysis, negotiations and results....
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...Mexico's program of Payments for Hydrological Environmental Services (PSAH) is a good example....
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...When the number of applications to participate in the PES program exceeds available finan- 25 In this view, the typical five-year time span of PES contracts (for example, in Costa Rica and Mexico) is a good compromise between the need to periodically re-negotiate contracts and the need to keep transaction costs low by not re-negotiating every year (Pagiola and Platais, 2007)....
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...…both ES levels and threats (i.e., the probability that ES would not have been provided in the absence of PES) in selecting among PES applicants, the real benefits of the program can be enhanced (see, e.g., Muñoz-Piña et al., 2008-this issue).29 Cost targeting is related tomaking payments flexible....
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Journal Article•DOI•

Rethinking ecosystem services to better address and navigate cultural values

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Kai M. A. Chan¹, Terre Satterfield¹, Joshua H. Goldstein²•Institutions (2)

University of British Columbia¹, Colorado State University²

01 Feb 2012-Ecological Economics

TL;DR: In this paper, the authors argue that the effectiveness of the ecosystem services framework in decision-making is thwarted by conflation of services, values, and benefits, and that failure to appropriately treat diverse kinds of values.

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1,269 citations

Journal Article•DOI•

Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries

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Sven Wunder¹, Stefanie Engel², Stefano Pagiola³•Institutions (3)

Center for International Forestry Research¹, ETH Zurich², World Bank³

01 May 2008-Ecological Economics

TL;DR: In this article, the authors synthesize the information presented, according to case characteristics with respect to design, costs, environmental effectiveness, and other outcomes, and conclude that user-financed PES programs were better targeted, more closely tailored to local conditions and needs, had better monitoring and a greater willingness to enforce conditionality, and had far fewer confounding side objectives than government-funded programs.

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1,157 citations

Journal Article•DOI•

Reconciling theory and practice: An alternative conceptual framework for understanding payments for environmental services☆

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Roldan Muradian¹, Esteve Corbera², Unai Pascual³, Nicolas Kosoy⁴, Peter H. May⁵ - Show less +1 more•Institutions (5)

Radboud University Nijmegen¹, University of East Anglia², University of Cambridge³, United Nations Environment Programme⁴, Universidade Federal Rural do Rio de Janeiro⁵

01 Apr 2010-Ecological Economics

TL;DR: In this paper, an alternative and novel theoretical approach to the conceptualization and analysis of payments for environmental services (PES) is presented, taking into account complexities related to uncertainty, distributional issues, social embeddedness, and power relations.

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987 citations

Cites background from "Paying for the hydrological service..."

...Seemingly, environmental additionality is probably low (Muñoz-Piña et al., 2008) since indigenous communities will likely conserve the forests independently of the payment, and therefore we assume that the importance of the economic incentive is relatively small....
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...Furthermore, environmental services are often not fully defined, and in particular PES tend to be implementedwithoutpreviously establishinga clear-cut causal relationship between land use practices and the expected enhancement of the targeted environmental services (Muñoz-Piña et al., 2008)....
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Book•

The economics of ecosystems and biodiversity : mainstreaming the economics of nature : a synthesis of the approach, conclusions and recommendations of TEEB

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Joshua Bishop, Patrick ten Brink, Haripriya Gundimeda, Pushpam Kumar, Carsten Nesshöver, Christoph Schröter-Schlaack, Ben Simmons, Pavan Sukhdev, Heidi Wittmer - Show less +5 more

01 Jan 2010

TL;DR: In this paper, the authors highlight and illustrate the approach adopted by TEEB: namely to show how economic concepts and tools can help equip society with the means to incorporate the values of nature into decision making at all levels.

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Abstract: The aim of this synthesis is to highlight and illustrate the approach adopted by TEEB: namely to show how economic concepts and tools can help equip society with the means to incorporate the values of nature into decision making at all levels.

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958 citations

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References

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Open Access

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Journal Article•DOI•

Organization for Economic Co-Operation and Development (OECD).

[...]

Robert M. Deiters

01 Jan 1968-Monumenta Nipponica

855 citations

"Paying for the hydrological service..." refers methods in this paper

...The spatial analysis (see Muñoz-Piña et al., 2004) uses qualitative dependent variable data on deforestation, observing whether a particular forested pixel in 1994 appears in the satellite images of 2000 as preserved, degraded, or deforested....
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Silver bullet or fools' gold? A global review of markets for forest environmental services and their impact on the poor.

[...]

N. Landell-Mills, Ina Porras

01 Jan 2002

TL;DR: In this article, the authors define markets as regular gatherings of people for the purpose of buying and selling goods or services, distinguished from public payments to private landowners for ecosystem services, or private deals between a few buyers and sellers.

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Abstract: Ever since the passage of the 1990 amendments to the US Clean Air act and the creation of a market in sulfur dioxide (SO2), it has become clear that market mechanisms can be effectively used to achieve environmental policies. But markets are neither infallible nor automatic. They have blind spots and they need to be designed effectively if they are to effectively achieve environmental ends. This paper defines markets as regular gatherings of people for the purpose of buying and selling goods or services. Such markets are distinguished from public payments to private landowners for ecosystem services, or private deals between a few buyers and sellers. It then provides a brief overview of several existing and proposed environmental markets, including: the Acid Rain market in the US, the Emissions Trading Scheme in the UK, the proposed Emissions Trading System for the European Union, the US market in greenhouse gases proposed by Senators McCain and Lieberman, the US market in wetlands mitigation credits, and the renewable energy market in Texas. From these the paper attempts to draw some lessons and conclusions. URI http://hdl.handle.net/10919/66848 Collections Sustainable Agriculture and Natural Resource Management (SANREM) Knowledgebase [4055] Silver bullet or fools' gold: A global review of markets for forest environmental services and their impact on the poor Landell-Mills, N.; Porras, I.T. (London: International Institute for Environment and Development, 2002) Market-based approaches to environmental management are increasingly common in all sectors of the economy. Forestry is no exception. Governments around the world have opened the door to private sector participation in all ... Exploring the market for voluntary carbon offsets Taiyab, N. (London: International Institute for Environment and Development (IIED), 2006) This paper explores the potential for financing small-scale high-benefit sustainable development projects through the voluntary and retail sector of the carbon market. Through a literature review and interviews with offset ... Creating markets for environmental stewardship: Potential benefits and problems Ribaudo, M. (Washington, D.C.: Economic Research Service, USDA, 2008) This topical article from the United States Department of Agriculture summarizes some of the potential benefits and problems faced by defining environmental services markets in the United States. Though the discussion is ... If you believe that any material in VTechWorks should be removed, please see our Making environmental markets work: lessons from early experience with sulfur, carbon, wetlands, and other related markets 

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823 citations

"Paying for the hydrological service..." refers background in this paper

...…poor are not participating as much as the rest, and more research is needed to find out whether this is due to the inability of the poorest communities to cover some transaction costs (Landell-Mills and Porras, 2002) or because of exclusion from the political networks linked to the forestry agency....
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Journal Article•DOI•

Auctions for conservation contracts: an empirical examination of Victoria’s BushTender trial

[...]

Gary Stoneham, Vivek Chaudhri¹, Arthur Ha, Loris Strappazzon•Institutions (1)

Melbourne Business School¹

01 Dec 2003-Australian Journal of Agricultural and Resource Economics

TL;DR: In this paper, an auction of con- servation contracts was designed to reveal hidden information needed to facilitate meaningful transactions between landholders and government, and the results obtained from a pilot auction of conservation contracts run in two regions of Victoria were shown that auctioning conservation contracts for environmental outcomes is an important new policy mechanism that deserves closer examination.

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Abstract: The present paper proposes that markets for nature conservation on private land are missing because of the problem of asymmetric information. An auction of con- servation contracts was designed to reveal hidden information needed to facilitate meaningful transactions between landholders and government. The present paper describes the key elements of auction and contract design employed and the results obtained from a pilot auction of conservation contracts run in two regions of Victoria. The pilot demonstrated that it was possible to create at least the supply side of a market for nature conservation and in conjunction with a defined budget, prices were discovered and resources allocated through contracts with landholders. The present paper compares a discriminative price auction with a hypothetical fixed-price scheme showing that an auction could offer large cost savings to govern- ments interested in nature conservation on private land. The paper identifies some important design problems that would need to be solved before auctions could be applied more broadly including: multiple complementary outcomes, reserve prices, sequential auction design and contract design. Nevertheless, the paper does show that auctioning conservation contracts for environmental outcomes is an important new policy mechanism that deserves closer examination.

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527 citations

Journal Article•DOI•

Auctioning Conservation Contracts: A Theoretical Analysis and an Application

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Uwe Latacz-Lohmann¹, Carel P. C. M. Van der Hamsvoort²•Institutions (2)

University of London¹, Agricultural & Applied Economics Association²

01 May 1997-American Journal of Agricultural Economics

TL;DR: In this article, a model of optimal bidding for conservation contracts is developed and applied to a hypothetical conservation program, and the model is used to analyze the potential benefits of auctions in allocating contracts for the provision of nonmarket goods in the countryside.

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Abstract: Auction theory is used to analyze the potential benefits of auctions in allocating contracts for the provision of nonmarket goods in the countryside. A model of optimal bidding for conservation contracts is developed and applied to a hypothetical conservation program. Competitive bidding, compared to fixed-rate payments, can increase the cost effectiveness of conservation contracting significantly. The cost revelation mechanism inherent in the bidding process makes auctions a powerful means by which to reduce the problems of information asymmetry. Strategic bidding behavior, which may adversely affect the performance of sequential auctions, is difficult to address by means of auction design.

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446 citations

"Paying for the hydrological service..." refers background in this paper

...As Latacz-Lohmann and Van der Hamsvoort (1997) and Stoneham et al. (2003) point out, there can be significant gains from using an auction instead of a fixed-price approach due to the presence of asymmetric information in conservation agreements (see also Ferraro, this issue)....
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Book•

Mexico City : México

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J. M. Cohen, Bob Schalkwijk

01 Jan 1965

445 citations