Evalutation of payments for ecosystem services in the valley region of Bolivia
This report explores whether the payment employed in a PWS implemented by the non-governmental organization Fundación Natura in the Los Negros watershed of Bolivia offers significant incentive to conserve forest cover and has the ability to meet landowners’ opportunity cost of alternative uses of land. Since 2003, upstream farmers have enrolled parcels of land and been compensated $3 per hectare per year for conserving forest cover. In 2008, sixty-two farm surveys were completed and their location geo-referenced in the Los Negros watershed to determine annual net farm income per hectare as a measure of marginal opportunity cost to land. Opportunity costs were modeled using biophysical characteristics of farm parcels, economic parameters of the market and distances to roads. The model was used to map opportunity costs across the watershed.
The economic model predicted significant variation in opportunity cost across the Los Negros watershed with a range of US $0 to $8493 per hectare. The majority of landowners were overcompensated with 75% of the area in conservation carrying opportunity costs of US $0 per hectare. Other areas are significantly under-compensated at the current compensation rate and could be under the highest threat of deforestation. While increased cost effectiveness could be achieved and more meaningful incentives offered to landowners by differentiating compensation, consideration should be given to non-financial benefits of the PWS, such as strengthened property rights, as well as the political costs of price differentiation.
Advisor:Vincent, Jeffrey R.
School Location:USA - North Carolina
Source Type:Master's Thesis
Keywords:payments for ecosystem services opportunity costs
Date of Publication:04/24/2009