User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower
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 three percent 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.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rabin, Mathew, 1991.
"Cognitive Dissonance and Social Change,"
Department of Economics, Working Paper Series
qt37b169jt, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Marchamalo, M. & Romero, C., 2007. "Participatory decision-making in land use planning: An application in Costa Rica," Ecological Economics, Elsevier, vol. 63(4), pages 740-748, September.
- Wünscher, Tobias & Engel, Stefanie & Wunder, Sven, 2008. "Spatial targeting of payments for environmental services: A tool for boosting conservation benefits," Ecological Economics, Elsevier, vol. 65(4), pages 822-833, May.
- Kosoy, Nicolas & Martinez-Tuna, Miguel & Muradian, Roldan & Martinez-Alier, Joan, 2007. "Payments for environmental services in watersheds: Insights from a comparative study of three cases in Central America," Ecological Economics, Elsevier, vol. 61(2-3), pages 446-455, March.
- Decker, Christopher S, 2003. "Corporate Environmentalism and Environmental Statutory Permitting," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 103-29, April.
- Vidovic, Martina & Khanna, Neha, 2007. "Can voluntary pollution prevention programs fulfill their promises? Further evidence from the EPA's 33/50 Program," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 180-195, March.
- Pagiola, Stefano, 2008.
"Payments for environmental services in Costa Rica,"
Elsevier, vol. 65(4), pages 712-724, May.
- Matthew J. Kotchen & Michael R. Moore, 2004.
"Private Provision of Environmental Public Goods: Household Participation in Green-Electricity Programs,"
Department of Economics Working Papers
2004-07, Department of Economics, Williams College.
- Kotchen, Matthew J. & Moore, Michael R., 2007. "Private provision of environmental public goods: Household participation in green-electricity programs," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 1-16, January.
- Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
- Segerson, Kathleen & Miceli, Thomas J., 1998. "Voluntary Environmental Agreements: Good or Bad News for Environmental Protection?," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 109-130, September.
- Delmas Magali & Marcus Alfred, 2004. "Firms' Choice of Regulatory Instruments to Reduce Pollution: A Transaction Cost Approach," Business and Politics, De Gruyter, vol. 6(3), pages 1-22, December.
- Thomas P. Lyon & John W. Maxwell, 2006.
"Greenwash: Corporate Environmental Disclosure under Threat of Audit,"
2006-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Thomas P. Lyon & John W. Maxwell, 2011. "Greenwash: Corporate Environmental Disclosure under Threat of Audit," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(1), pages 3-41, 03.
- 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.
- Maxwell, John W & Lyon, Thomas P & Hackett, Steven C, 2000.
"Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism,"
Journal of Law and Economics,
University of Chicago Press, vol. 43(2), pages 583-617, October.
- John W. Maxwell & Thomas P Lyon & Steven C.. Hackett, 1995. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," University of Chicago - George G. Stigler Center for Study of Economy and State 122, Chicago - Center for Study of Economy and State.
- Sierra, Rodrigo & Russman, Eric, 2006. "On the efficiency of environmental service payments: A forest conservation assessment in the Osa Peninsula, Costa Rica," Ecological Economics, Elsevier, vol. 59(1), pages 131-141, August.
- Blackman, Allen & Bannister, Geoffrey J., 1998. "Community Pressure and Clean Technology in the Informal Sector: An Econometric Analysis of the Adoption of Propane by Traditional Mexican Brickmakers," Journal of Environmental Economics and Management, Elsevier, vol. 35(1), pages 1-21, January.
- Robalino, Juan & Pfaff, Alexander & Sanchez-Azofefia, G. Arturo & Alpizar, Francisco & Leon, Carlos & Rodriguez, Carlos Manuel, 2008. "Deforestation Impacts of Environmental Services Payments: Costa Rica’s PSA Program 2000–2005," Discussion Papers dp-08-24-efd, Resources For the Future.
- Turpie, J.K. & Marais, C. & Blignaut, J.N., 2008. "The working for water programme: Evolution of a payments for ecosystem services mechanism that addresses both poverty and ecosystem service delivery in South Africa," Ecological Economics, Elsevier, vol. 65(4), pages 788-798, May.
- 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.
- Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
- Nunes, Paulo A. L. D. & Schokkaert, Erik, 2003. "Identifying the warm glow effect in contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 231-245, March.
- Akerlof, George A & Dickens, William T, 1982. "The Economic Consequences of Cognitive Dissonance," American Economic Review, American Economic Association, vol. 72(3), pages 307-19, June.
- Miriam Miranda & Carel Dieperink & Pieter Glasbergen, 2007. "Voluntary Agreements In Watershed Protection Experiences From Costa Rica," Environment, Development and Sustainability, Springer, vol. 9(1), pages 1-19, February.
- Menz, Fredric C., 2005. "Green electricity policies in the United States: case study," Energy Policy, Elsevier, vol. 33(18), pages 2398-2410, December.
- Blackman, Allen & Mazurek, Janice, 1999. "The Cost of Developing Site-Specific Environmental Regulations: Evidence from EPA's Project XL," Discussion Papers dp-99-35-rev, Resources For the Future.
- J Videras & A Alberini, 2000. "The appeal of voluntary environmental programs: which firms participate and why?," Contemporary Economic Policy, Western Economic Association International, vol. 18(4), pages 449-460, October.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-09-03-efd. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster)
If references are entirely missing, you can add them using this form.