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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

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.

Suggested Citation

  • Koellner, Thomas & Sell, Joachim & Navarro, Guillermo, 2010. "Why and how much are firms willing to invest in ecosystem services from tropical forests? A comparison of international and Costa Rican firms," Ecological Economics, Elsevier, vol. 69(11), pages 2127-2139, September.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:11:p:2127-2139
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    References listed on IDEAS

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    1. repec:eee:ecoser:v:2:y:2012:i:c:p:56-70 is not listed on IDEAS
    2. repec:eee:ecoser:v:9:y:2014:i:c:p:83-97 is not listed on IDEAS
    3. Ojea, Elena & Martin-Ortega, Julia, 2015. "Understanding the economic value of water ecosystem services from tropical forests: A systematic review for South and Central America," Journal of Forest Economics, Elsevier, vol. 21(2), pages 97-106.
    4. 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.
    5. 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.
    6. Farley, Joshua & Costanza, Robert, 2010. "Payments for ecosystem services: From local to global," Ecological Economics, Elsevier, vol. 69(11), pages 2060-2068, September.
    7. Nathalie Meißner & Ulrike Grote, 2017. "Motives, opportunities, and risks for private sector investment in protected areas with international importance: evidence from German companies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(1), pages 199-219, February.

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