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User financing in a national payments for environmental services program: Costa Rican hydropower

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  • Blackman, Allen
  • Woodward, Richard T.

Abstract

National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems can be mitigated by supplementing government financing with contributions from leading environmental service users. We use original survey data and official statistics to analyze user financing in Costa Rica's renowned national PES program, focusing on the amounts and sources of user financing, the drivers of contributions, and contributors' perceptions of the PES program. We find that user financing has supported less than 3% of the acres enrolled in the program and that hydroelectric plants are the largest private sector contributors. Large hydroelectric plants tend to contribute while small ones do not. The weight of evidence suggests that in addition to ensuring the provision of forest environmental services, hydroelectric plants' motives for contributing to the PES program include improving relations with local communities and government regulators--common drivers of participation in all manner of voluntary environmental programs. These findings raise questions about the potential of user financing to improve the efficiency and financial sustainability of national PES programs.

Suggested Citation

  • Blackman, Allen & Woodward, Richard T., 2010. "User financing in a national payments for environmental services program: Costa Rican hydropower," Ecological Economics, Elsevier, vol. 69(8), pages 1626-1638, June.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:8:p:1626-1638
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    Cited by:

    1. Amrish Patel & Edward Cartwright, 2012. "Naïve Beliefs and the Multiplicity of Social Norms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, pages 280-289.
    2. Lewis, Kate & Porras, Ina & Miranda, Miriam & Barton, David & Chacon, Adriana, 2012. "De Rio a Rio+ Lecciones de 20 años de experiencia en servicios ambientales en Costa Rica
      [From Rio to Rio + Lessons from 20 years of experience in environmental services in Costa Rica]
      ," MPRA Paper 43649, University Library of Munich, Germany.
    3. Van Hecken, Gert & Bastiaensen, Johan & Windey, Catherine, 2015. "The frontiers of the debate on Payments for Ecosystem Services: a proposal for innovative future research," IOB Discussion Papers 2015.05, Universiteit Antwerpen, Institute of Development Policy (IOB).
    4. Dale Whittington & Stefano Pagiola, 2012. "Using Contingent Valuation in the Design of Payments for Environmental Services Mechanisms: A Review and Assessment," World Bank Research Observer, World Bank Group, vol. 27(2), pages 261-287, August.
    5. Coria, Jessica & Calfucura, Enrique, 2012. "Ecotourism and the development of indigenous communities: The good, the bad, and the ugly," Ecological Economics, Elsevier, pages 47-55.
    6. Vatn, Arild, 2015. "Markets in environmental governance. From theory to practice," Ecological Economics, Elsevier, pages 225-233.
    7. repec:eee:ecolec:v:144:y:2018:i:c:p:36-58 is not listed on IDEAS
    8. repec:eee:ecolec:v:144:y:2018:i:c:p:195-213 is not listed on IDEAS
    9. Van Hecken, Gert & Bastiaensen, Johan & Vásquez, William F., 2012. "The viability of local payments for watershed services: Empirical evidence from Matiguás, Nicaragua," Ecological Economics, Elsevier, pages 169-176.
    10. Rodrigo A. Arriagada, & Paul J. Ferraro & Erin O. Sills & Subhrendu K. Pattanayak & Silvia Cordero-Sancho, 2012. "Do Payments for Environmental Services Affect Forest Cover? A Farm-Level Evaluation from Costa Rica," Land Economics, University of Wisconsin Press, pages 382-399.
    11. Ina, Porras & Bruce, Alyward & Jeff, Dengel, 2013. "Monitoring payments for watershed services schemes in developing countries," MPRA Paper 47185, University Library of Munich, Germany.

    More about this item

    Keywords

    Payments for environmental services Voluntary regulation Hydroelectricity Costa Rica;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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