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Willingness to accept compensation for the environmental risks of oil transport on the Amazon: A choice modeling experiment

  • Casey, James F.
  • Kahn, James R.
  • Rivas, Alexandre A.F.
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    This paper looks at the question of whether subsistence level/indigenous people place a value on the preservation of ecosystems independent of direct impacts of environmental change, such as impacts on their production activities. The economics literature generally suggests that non-use values don't exist among the poor and in the informal sector of the economy. We examine this issue through a choice modeling experiment. A survey was conducted of rainforest communities who live on the banks of the Amazon River (Rio Solimões), in the vicinity of proposed oil and gas pipelines. The data were analyzed in the choice modeling framework, revealing relatively high amounts of compensation that were necessary in order to accept the potential ecosystem damages associated with oil transport, even if the people were completely compensated for direct damages such as loss of access to productive resources. These results suggest that environmental quality is important for its own sake, a result that is very different from the implicit assumption among many economists.

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    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 67 (2008)
    Issue (Month): 4 (November)
    Pages: 552-559

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    Handle: RePEc:eee:ecolec:v:67:y:2008:i:4:p:552-559
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    1. David I. Stern, 2003. "The Rise and Fall of the Environmental Kuznets Curve," Rensselaer Working Papers in Economics 0302, Rensselaer Polytechnic Institute, Department of Economics.
    2. Chuan-zhong Li & Jari Kuuluvainen & Eija Pouta & Mika Rekola & Olli Tahvonen, 2004. "Using Choice Experiments to Value the Natura 2000 Nature Conservation Programs in Finland," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(3), pages 361-374, November.
    3. Rolfe, John & Bennett, Jeff & Louviere, Jordan, 2000. "Choice modelling and its potential application to tropical rainforest preservation," Ecological Economics, Elsevier, vol. 35(2), pages 289-302, November.
    4. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
    5. Shrestha, Ram K. & Alavalapati, Janaki R. R., 2004. "Valuing environmental benefits of silvopasture practice: a case study of the Lake Okeechobee watershed in Florida," Ecological Economics, Elsevier, vol. 49(3), pages 349-359, July.
    6. Roe, Brian & Boyle, Kevin J. & Teisl, Mario F., 1996. "Using Conjoint Analysis to Derive Estimates of Compensating Variation," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 145-159, September.
    7. Stephen K. Swallow & James J. Opaluch & Thomas F. Weaver, 1992. "Siting Noxious Facilities: An Approach That Integrates Technical, Economic, and Political Considerations," Land Economics, University of Wisconsin Press, vol. 68(3), pages 283-301.
    8. Stevens, Thomas H. & Barrett, Christopher B. & Willis, Cleve E., 1997. "Conjoint Analysis Of Groundwater Protection Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(2), October.
    9. Stevens, T. H. & Belkner, R. & Dennis, D. & Kittredge, D. & Willis, C., 2000. "Comparison of contingent valuation and conjoint analysis in ecosystem management," Ecological Economics, Elsevier, vol. 32(1), pages 63-74, January.
    10. Nick Hanley & Robert Wright & Vic Adamowicz, 1998. "Using Choice Experiments to Value the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 413-428, April.
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