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Protected areas, local governments, and strategic interactions: The case of the ICMS-Ecológico in the Brazilian state of Paraná

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  • Sauquet, Alexandre
  • Marchand, Sébastien
  • Féres, José Gustavo

Abstract

Various conservation initiatives have been implemented in developing countries with increasing involvement on the part of local governments. A concern in entrusting decisions to local governments is that the effectiveness of the conservation instrument can be threatened by interactions among these local governments. We examine this concern with respect to an ecological fiscal transfer mechanism, the ICMS-Ecológico, implemented in Brazil in the early 1990's in order to reduce biodiversity loss. The mechanism enables states to reward municipalities for the creation and management of protected areas. We describe this mechanism, present a conceptual framework aimed at understanding the potential sources and consequences of interactions among local governments on the effectiveness of a decentralized mechanism aimed at promoting the creation of protected areas, and propose an empirical application using a Bayesian spatial Tobit model. Our empirical investigation on the creation of protected areas in the state of Paraná between 2000 and 2010 reveals strategic substitutability in municipalities' conservation decisions. This finding also leads us to discuss the issue of identification of a negative spatial lag coefficient when there is a positive spatial error correlation.

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  • Sauquet, Alexandre & Marchand, Sébastien & Féres, José Gustavo, 2014. "Protected areas, local governments, and strategic interactions: The case of the ICMS-Ecológico in the Brazilian state of Paraná," Ecological Economics, Elsevier, vol. 107(C), pages 249-258.
    • Handle: RePEc:eee:ecolec:v:107:y:2014:i:c:p:249-258
    DOI: 10.1016/j.ecolecon.2014.09.008
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    11. Comini, Indira Bifano & Gonçalves Jacovine, Laércio Antônio & Zanuncio, José Cola & Lima, Gumercindo Souza, 2019. "Contribution of conservation units to Ecological ICMS generation for municipalities and environmental conservation," Land Use Policy, Elsevier, vol. 86(C), pages 322-327.
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    13. Ruggiero, P.G.C. & Pfaff, A. & Pereda, P. & Nichols, E. & Metzger, J.P., 2022. "The Brazilian intergovernmental fiscal transfer for conservation: A successful but self-limiting incentive program," Ecological Economics, Elsevier, vol. 191(C).
    14. Silva, Lauana Blenda & Comini, Indira Bifano & Alves, Eliana Boaventura Bernardes Moura & da Rocha, Samuel José Silva Soares & Jacovine, Laércio Antônio Gonçalves, 2021. "Compensating the negative environmental impacts of mining with financial mechanisms in Brazil," Land Use Policy, Elsevier, vol. 104(C).
    15. Lima de Paulo, Felipe Luiz & Camões, Pedro Jorge Sobral, 2019. "Ecological Fiscal Transfers for Biodiversity Conservation Policy: A Transaction Costs Analysis of Minas Gerais, Brazil," Ecological Economics, Elsevier, vol. 166(C), pages 1-1.

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