Poor household participation in payments for environmental services in Nicaragua and Colombia

Rios, Ana R. and Pagiola, Stefano (2009): Poor household participation in payments for environmental services in Nicaragua and Colombia.

Abstract

We evaluate the extent to which poor households are able to participate in Payments for Environmental Services (PES) scheme using data from a PES scheme implemented at two sites in Latin America. This allows us to compare environmental and livelihood impacts of PES across regions with different agronomic and socio-economic characteristics. In particular, one of our sites is composed almost entirely of poor or extremely poor households, while the other has households ranging from extremely poor to very well off. The results show that poorer households are in fact able to participate—indeed, by some measures they participated to a greater extent than better-off households. Moreover, their participation was not limited to the simpler, least expensive options. Extremely poor households had a somewhat greater difficulty in participating, but even in their case the difference is solely a relative one. Transaction costs may be greater obstacles to the participation of poorer households than household-specific constraints.

• Item Type: MPRA Paper
• Language: English
• Keywords: Payments for environmental services, PES, poverty, silvopastoral
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I39 - Other; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology

References

Belsley, D.A. 1991. Conditioning Diagnostics, Collinearity and Weak Data in Regression. New York: John Wiley & Sons.

Belsley, D.A., E. Kuh, and R.E. Welsch. 1980. Regression Diagnostics: Indentifying Influential Data and Sources of Collinearity. New York: John Wiley & Sons.

Bruijnzeel, L.A. 2004. “Hydrological functions of moist tropical forests: Not seeing the soil for the trees?” Agriculture, Ecosystems and Environments, 104(1), pp.185-228.

CIPAV. 2003. Usos de la Tierra en Fincas Ganaderas: Guía para el Pago de Servicios Ambientales en el Proyecto Enfoques Silvopastoriles Integrados para el Manejo de Ecosistemas. Cali: Fundación CIPAV.

Dagang, A.B.K., and P.K.R. Nair. 2003. “Silvopastoral research and adoption in Central America: Recent findings and recommendations for future directions.”Agroforestry Systems, 59(2), pp.149–155.

de Janvry, A., and E. Sadoulet. 2000. “Rural poverty in Latin America: Determinants and exit paths.” Food Policy, 25, pp.389-409.

Dennis, P., L. Shellard, and R. Agnew. 1996. “Shifts in arthropod species assemblages in relation to silvopastoral establishment in upland pastures.” Agroforestry Forum 7, pp.14-21.

Engel, S., S. Pagiola, and S. Wunder. 2008. “Designing payments for environmental services in theory and practice: An overview of the issues.” Ecological Economics, 65(4), pp.663-674.

Ervin, C.A., and D.E. Ervin. 1982. “Factors affecting the use of soil conservation practices: Hypothesis, evidence, and policy implications.” Land Economics, 58(3), pp.278-292.

Feder, G., R.E. Just, and D. Zilberman. 1985. “Adoption of agricultural innovations in developing countries: A survey.” Economic Development and Cultural Change, 33(2), pp.255-295.

Ferraro, P.J., and S.K. Pattanayak. 2006. “Money for nothing? A call for empirical evaluation of biodiversity conservation investments.” PLoS Biology, 4(4), pp.482-488.

Fisher, M.J., I.M. Rao. M.A. Ayarza, C.E. Lascano, J.I. Sanz, R.J. Thomas, and R.R. Vera. 1994. “Carbon storage by introduced deep-rooted grasses in the South American savannas.” Nature, 371, pp.236-238.

Gobbi, J. 2002. “Enfoques silvopastoriles integrados para el manejo de ecosistemas en Colombia, Costa Rica y Nicaragua: Análisis económico-financiero ex-ante de la inversión en los SSP propuestos para cada país.” Turrialba, Costa Rica: CATIE.

Greene, W.H. 2000. Econometric Analysis. 4th ed. Upper Saddle River: Prentice Hall.

Harvey, C., and W. Haber. 1999. “Remnant trees and the conservation of biodiversity in Costa Rican pastures.” Agroforestry Systems, 44(1), pp.37-68.

López, R., and A. Valdés. 2000. Rural poverty in Latin America. New York: St. Martin's Press.

Mercer, D.E. 2004. “Adoption of agroforestry innovations in the tropics: A review.” Agroforestry Systems, 61(1), pp.311-328.

Miranda, M., I.T. Porras, and M.L. Moreno. 2003. “The social impacts of payments for environmental services in Costa Rica: A quantitative field survey and analysis of the Virilla watershed.” Markets for Environmental Services Paper No.1. London: IIED.

Mittelhammer, R.C., G.G. Judge, and D.J. Miller. 2000. Econometric Foundations. New York: Cambridge University Press.

Muñoz, C., A. Guevara, J.M. Bulás, J.M. Torres, and J. Braña. 2006. “Los pagos por los servicios hidrológicos del bosque en México.” In: S. Pagiola, J. Bishop, and N. Landell-Mills, eds., La Venta de Servicios Ambientales Forestales. 2nd edition. México: Instituto Nacional de Ecología.

Nkonya, E., T. Schroeder, and D. Norman. 1997. “Factors affecting adoption of improved maize seed and fertiliser in Northern Tanzania.” Journal of Agricultural Economics, 48, pp.1-12.

Nowak, P.J. 1987. “The adoption of agricultural conservation technologies: Economic and diffusion explanations.” Rural Sociology, 52, pp.208-220.

Ortiz Malavasi, R., L.F. Sage Mora, and C. Borge Carvajal. 2002. “Impacto del Programa de Pago por Servicios Ambientales en Costa Rica como medio de reducción de pobreza en los medios rurales.” San José: RUTA.

Pagiola, S. 2008. “Payments for environmental services in Costa Rica.” Ecological Economics, 65(4), pp.712-724.

Pagiola, S., and A. Colom. 2006. “Will payments for watershed services help reduce poverty? Evidence from Guatemala.” Washington: World Bank.

Pagiola, S., and G. Platais. 2007. Payments for environmental services: From theory to practice. Washington: World Bank.

Pagiola, S., P. Agostini, J. Gobbi, C. de Haan, M. Ibrahim, E. Murgueitio, E. Ramírez, M. Rosales, and J.P. Ruíz. 2004. “Paying for biodiversity conservation services in agricultural landscapes.” Environment Department Paper No.96. Washington: World Bank.

Pagiola, S., A. Arcenas, and G. Platais. 2005. “Can payments for environmental services help reduce poverty? An exploration of the issues and the evidence to date from Latin America.” World Development, 33(2), pp.237-253.

Pagiola, S., E. Ramírez, J. Gobbi, C. de Haan, M. Ibrahim, E. Murgueitio, and J.P. Ruíz. 2007a. “Paying for the environmental services of silvopastoral practices in Nicaragua.” Ecological Economics, 64(2), pp.374-385.

Pagiola, S., A. Rios, and A. Arcenas. 2007b. “Poor household participation in payments for environmental services: Lessons from the Silvopastoral Project in Quindío, Colombia.” Washington: World Bank.

Pagiola, S., A. Rios, and A. Arcenas. 2008. “Can the poor participate in payments for environmental services? Lessons from the Silvopastoral Project in Nicaragua.” Environment and Development Economics, 13(3), pp.299–325.

Pattanayak, S.K., D.E. Mercer, E. Sills, and J.-C Yang. 2003. “Taking stock of agroforestry adoption studies.” Agroforestry Systems, 57(3), pp.173-186.

Rajasekharan, P., and S. Veeraputhran. 2002. “Adoption of intercropping in rubber smallholdings in Kerala, India: A tobit analysis.” Agroforestry Systems, 56(1), pp.1-11.

Ravallion, M. 1992. “Poverty comparisons: A guide to concepts and methods.” LSMS Working Paper No.LSM88. Washington: World Bank.

Swallow, S., M. van Noordwijk, S. Dewi, D. Murdiyarso, D. White, J. Gockowski, G. Hyman, S. Budidarsono, V. Robiglio, V. Meadu, A. Ekadinata, F. Agus, K. Hairiah, P. Mbile, D.J. Sonwa, and S. Weise. 2007. “Opportunities for avoided deforestation with sustainable benefits. Bogor: ASB partnership for the Tropical Forest Margins.

Thacher, T., D.R. Lee, and J.W. Schelhas. 1997. “Farmer participation in reforestation incentive programs in Costa Rica.” Agroforestry Systems, 35(3), pp.269-289.

White, H. 1980. “A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity.” Econometrica, 48, pp.817-838.

White, D., F. Holmann, S. Fuijsaka, K. Reategui, and C. Lascano. 2001. “Will intensifying pasture management in latin america protect forests? – Or is it the other way round?” In: A. Angelsen and D. Kaimowitz, eds, Agricultural Technologies and Tropical Deforestation. Oxford: CAB International.

World Bank. 2002. “Colombia poverty report.” Report No.24524-CO. Washington: World Bank.

World Bank. 2003. “Nicaragua reporte de pobreza: Aumentando el bienestar y reduciendo la vulnerabilidad.” Report No.26128-NI. Washington: World Bank.

Wunder, S. 2005. “Payments for environmental services: Some nuts and bolts.” CIFOR Occasional Paper No.42. Bogor: CIFOR.

Wunder, S., 2008. “Payments for environmental services and the poor: concepts and preliminary evidence.” Environment and Development Economics, 13(3), pp.279-297.

Wunder, S., and Albán, M., 2008. “Decentralized payments for environmental services: The cases of Pimampiro and PROFAFOR in Ecuador.” Ecological Economics, 65(4), pp.685-698

Zbinden, S. and D.R. Lee. 2005. “Institutional arrangements for rural poverty reduction and resource conservation.” World Development, 33(2), pp.255-272.