Environmental Services and Poverty Alleviation: Either, or, or both?
AbstractPayments for environmental services (PES) schemes in developing countries face trade-offs between environmental and development objectives. This tension is inherent in cost effective direct PES since, by their very nature, they limit transfers to recipients. However, where recipients of PES are subject to market constraints (e.g. credit rationing, input constraints etc.), we show that indirect payments which relax constraints can be cost effective and achieve both environmental and poverty alleviation objectives. Contrary to where markets are perfect, cost effectiveness is dependent on the nature of the recipient’s production and the severity of constraints. An empirical example from Madagascar illustrates that it is unlikely these dual objectives will be achieved in the case of forest honey production, despite a severe technology constraint. Yet indirect PES schemes are shown to be cost effective where production is more closely linked to land use, such as in agriculture and forestry. This accords with recent work on agri-environmental schemes, which achieved poverty alleviation and environmental objectives by relaxing household constraints. This highlights the need to understand the market conditions, institutional context and production processes of PES recipients.
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Bibliographic InfoPaper provided by University of Cambridge, Department of Land Economics in its series Environmental Economy and Policy Research Working Papers with number 46.2009.
Date of creation: 2009
Date of revision: 2009
Payments for environmental services; cost effectiveness; market constraints; poverty alleviation.;
Other versions of this item:
- Ben Groom & Charles Palmer, 2009. "Environmental services and poverty alleviation: either, or, or both?," LSE Research Online Documents on Economics 27951, London School of Economics and Political Science, LSE Library.
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-11-07 (Agricultural Economics)
- NEP-ALL-2009-11-07 (All new papers)
- NEP-ENV-2009-11-07 (Environmental Economics)
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- Ben Groom & Charles Palmer, 2012. "Relaxing Constraints as a Conservation Policy," Working Papers 2012.63, Fondazione Eni Enrico Mattei.
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