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Why and how much are firms willing to invest in ecosystem services from tropical forests? A comparison of international and Costa Rican firms

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  • Koellner, Thomas
  • Sell, Joachim
  • Navarro, Guillermo
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    Abstract

    In recent years, schemes for payment for ecosystem services PES have emerged in tropical countries. Besides public demand, the private demand offers the opportunity to develop PES. The goal of this paper is to investigate the potential demand by firms for four ecosystem services from tropical forests: biodiversity conservation, carbon sequestration, scenic beauty, and watershed protection. Those are the four granted in the forest legislation and rewarded for in the PES scheme in Costa Rica. To explain stated willingness to invest WTI, we assess influential factors: expectations with respect to financial and non-financial benefits of investing in ecosystem services; experience with forest ecosystem services; firm attributes, like origin, sector membership, and size; and finally, perceived behavioral control. We sent a questionnaire to over 900 international and Costa Rican firms from different sectors. The low response rate of the survey of overall 6% can be explained by - in a business context - rather new topic of ecosystem services from tropical forests. The analysis showed that a firm's willingness to invest (WTI) depends on the origin of the firm. International firms are interested in buying certificates mainly for carbon sequestration; Costa Rican firms, for all four ecosystem services in the following order: watershed protection, biodiversity conservation, carbon sequestration, and scenic beauty. Indirect and non-financial benefits are surprisingly important and can impede the development of ecosystem service markets. At the same time, the activities of intrinsically motivated green entrepreneurs in a financially oriented firm setting might be a prerequisite within a firm context for bringing such innovative topics as ecosystem services from tropical forests to the table.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 11 (September)
    Pages: 2127-2139

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    Handle: RePEc:eee:ecolec:v:69:y:2010:i:11:p:2127-2139

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    Web page: http://www.elsevier.com/locate/ecolecon

    Related research

    Keywords: Ecosystem services Tropical forests Business Willingness to Invest WTI;

    References

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    1. Sell, Joachim & Koellner, Thomas & Weber, Olaf & Proctor, Wendy & Pedroni, Lucio & Scholz, Roland W., 2007. "Ecosystem services from tropical forestry projects - The choice of international market actors," Forest Policy and Economics, Elsevier, vol. 9(5), pages 496-515, January.
    2. Batabyal, Amitrajeet A. & Kahn, James R. & O'Neill, Robert V., 2003. "On the scarcity value of ecosystem services," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 334-352, September.
    3. Sagoff, M., 1998. "Aggregation and deliberation in valuing environmental public goods:: A look beyond contingent pricing," Ecological Economics, Elsevier, vol. 24(2-3), pages 213-230, February.
    4. Wunder, Sven & Engel, Stefanie & Pagiola, Stefano, 2008. "Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries," Ecological Economics, Elsevier, vol. 65(4), pages 834-852, May.
    5. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    6. Pagiola, Stefano, 2006. "Payments for Environmental Services in Costa Rica," MPRA Paper 2010, University Library of Munich, Germany.
    7. Sell, Joachim & Koellner, Thomas & Weber, Olaf & Pedroni, Lucio & Scholz, Roland W., 2006. "Decision criteria of European and Latin American market actors for tropical forestry projects providing environmental services," Ecological Economics, Elsevier, vol. 58(1), pages 17-36, June.
    8. Muñoz-Piña, Carlos & Guevara, Alejandro & Torres, Juan Manuel & Braña, Josefina, 2008. "Paying for the hydrological services of Mexico's forests: Analysis, negotiations and results," Ecological Economics, Elsevier, vol. 65(4), pages 725-736, May.
    9. Loomis, John & Kent, Paula & Strange, Liz & Fausch, Kurt & Covich, Alan, 2000. "Measuring the total economic value of restoring ecosystem services in an impaired river basin: results from a contingent valuation survey," Ecological Economics, Elsevier, vol. 33(1), pages 103-117, April.
    10. Carson, Richard T., 1998. "Valuation of tropical rainforests: philosophical and practical issues in the use of contingent valuation," Ecological Economics, Elsevier, vol. 24(1), pages 15-29, January.
    11. Adams, Cristina & Seroa da Motta, Ronaldo & Ortiz, Ramón Arigoni & Reid, John & Ebersbach Aznar, Cristina & de Almeida Sinisgalli, Paulo Antonio, 2008. "The use of contingent valuation for evaluating protected areas in the developing world: Economic valuation of Morro do Diabo State Park, Atlantic Rainforest, São Paulo State (Brazil)," Ecological Economics, Elsevier, vol. 66(2-3), pages 359-370, June.
    12. Luke Brander & Raymond Florax & Jan Vermaat, 2006. "The Empirics of Wetland Valuation: A Comprehensive Summary and a Meta-Analysis of the Literature," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 33(2), pages 223-250, 02.
    13. Engel, Stefanie & Palmer, Charles, 2008. "Payments for environmental services as an alternative to logging under weak property rights: The case of Indonesia," Ecological Economics, Elsevier, vol. 65(4), pages 799-809, May.
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    Cited by:
    1. Mislimshoeva, Bunafsha & Samimi, Cyrus & Kirchhoff, Joachim-F. & Koellner, Thomas, 2013. "Analysis of costs and people's willingness to enroll in forest rehabilitation in Gorno Badakhshan, Tajikistan," Forest Policy and Economics, Elsevier, vol. 37(C), pages 75-83.
    2. Meißner, Nathalie, 2013. "The incentives of private companies to invest in protected area certificates: How coalitions can improve ecosystem sustainability," Ecological Economics, Elsevier, vol. 95(C), pages 148-158.
    3. Farley, Joshua & Costanza, Robert, 2010. "Payments for ecosystem services: From local to global," Ecological Economics, Elsevier, vol. 69(11), pages 2060-2068, September.

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