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Friday, 16 June 2017

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

Author
Listed author(s):
  • Muñoz-Piña, Carlos
  • Guevara, Alejandro
  • Torres, Juan Manuel
  • Braña, Josefina

Abstract
Mexico faces both high deforestation and severe water scarcity. The Payment for Hydrological Environmental Services (PSAH) Program was designed to complement other policy responses to the crisis at the interface of these problems. Through the PSAH, 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. Funding comes from fees charged to water users, from which nearly US$18Â million are earmarked for payments of environmental services. Applicants are selected according to several criteria that include indicators of the value of water scarcity in the region. This paper describes the process of policy design of the PSAH, the main actors involved in the program, its operating rules, and provides a preliminary evaluation. One of the main findings is that many of the program's payments have been in areas with low deforestation risk. Selection criteria need to be modified to better target the areas where benefits to water users are highest and behavior modification has the least cost, otherwise the program main gains will be distributive, but without bringing a Pareto improvement in overall welfare.

References

  1.  Wu, JunJie & Zilberman, David & Babcock, Bruce A., 2001. "Environmental and Distributional Impacts of Conservation Targeting Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 333-350, May.
  2.  McCarthy, Nancy & Sadoulet, Elisabeth & de Janvry, Alain, 2001. "Common Pool Resource Appropriation under Costly Cooperation," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 297-309, November.
  3.  Stoneham, Gary & Chaudhri, Vivek & Ha, Arthur & Strappazzon, Loris, 2003. "Auctions for conservation contracts: an empirical examination of Victoria’s BushTender trial," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), December.
  4.  Gary Stoneham & Vivek Chaudhri & Arthur Ha & Loris Strappazzon, 2003. "Auctions for conservation contracts: an empirical examination of Victoria's BushTender trial," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 477-500, December.
  5.  Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
  6.  Munoz-Pina, Carlos & de Janvry, Alain & Sadoulet, Elisabeth, 2003. "Recrafting Rights over Common Property Resources in Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 129-158, October.
  7.  Timothy N. Cason & Lata Gangadharan, 2004. "Auction Design for Voluntary Conservation Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1211-1217.
  8.  Ellen Douglas & Stanley Wood & Kate Sebastian & Charles Vörösmarty & Kenneth Chomitz & Thomas Tomich, 2007. "Policy implications of a pan-tropic assessment of the simultaneous hydrological and biodiversity impacts of deforestation," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 21(1), pages 211-232, January.
Full references (including those not matched with items on IDEAS)

For further details log on website :
https://ideas.repec.org/a/eee/ecolec/v65y2008i4p725-736.html

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