Using Cost-Effective Targeting to Enhance the Efficiency of Conservation Investments in Payments for Ecosystem Services

Authors

  • XIAODONG CHEN,

    Corresponding author
    1. Department of Fisheries and Wildlife, Center for Systems Integration and Sustainability, Michigan State University, East Lansing, MI 48823, U.S.A.
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  • FRANK LUPI,

    1. Department of Agricultural Food and Resource Economics, Michigan State University, East Lansing, MI 48824, U.S.A.
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  • ANDRÉS VIÑA,

    1. Department of Fisheries and Wildlife, Center for Systems Integration and Sustainability, Michigan State University, East Lansing, MI 48823, U.S.A.
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  • GUANGMING HE,

    1. Department of Fisheries and Wildlife, Center for Systems Integration and Sustainability, Michigan State University, East Lansing, MI 48823, U.S.A.
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  • JIANGUO LIU

    1. Department of Fisheries and Wildlife, Center for Systems Integration and Sustainability, Michigan State University, East Lansing, MI 48823, U.S.A.
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email chenxia2@msu.edu

Abstract

Abstract: Ecosystem services are being protected and restored worldwide through payments for ecosystem services in which participants are paid to alter their land-management approaches to benefit the environment. The efficiency of such investments depends on the design of the payment scheme. Land features have been used to measure the environmental benefits of and amount of payment for land enrollment in payment for ecosystem services schemes. Household characteristics of program participants, however, may also be important in the targeting of land for enrollment. We used the characteristics of households participating in China's Grain-to-Green program, and features of enrolled land to examine the targeting of land enrollment in that program in Wolong Nature Reserve. We compared levels of environmental benefits that can be obtained through cost-effective targeting of land enrollment for different types of benefits under different payment schemes. The efficiency of investments in a discriminative payment scheme (payments differ according to opportunity costs, i.e., landholders’ costs of forgoing alternative uses of land) was substantially higher than in a flat payment scheme (same price paid to all participants). Both optimal targeting and suboptimal targeting of land enrollment for environmental benefits achieved substantially more environmental benefits than random selection of land for enrollment. Our results suggest that cost-effective targeting of land through the use of discriminative conservation payments can substantially improve the efficiency of investments in the Grain-to-Green program and other payment for ecosystem services programs.

Abstract

Resumen: Los servicios ecosistémicos están siendo protegidos y restaurados en todo el mundo mediante el pago por servicios ecosistémicos, en el cual los participantes reciben pagos por alterar sus hábitos de uso del suelo para beneficio del ambiente. La eficiencia de tales inversiones depende del diseño del esquema de pagos. Los atributos del suelo han sido utilizados para medir tanto los beneficios ambientales como la cantidad a pagar por la participación en el esquema de pagos por servicios ecosistémicos. Sin embargo, las características familiares de los participantes en el programa también pueden ser importantes en la selección de tierras a inscribir. Utilizamos las características familiares de los participantes en el programa Grano-por-Verde en China y las características de los suelos para examinar la selección de tierras inscritas en dicho programa en la Reserva Natural Wolong. Comparamos los niveles de beneficios ambientales que se pueden obtener mediante la selección rentable de tierras, bajo diferentes tipos de beneficios y bajo diferentes esquemas de pago. La eficiencia de las inversiones en un esquema de pago diferencial (los pagos difieren de acuerdo con los costos de oportunidad, i.e. los costos por renunciar a usos alternativos del suelo) fue sustancialmente mayor que en un esquema de pago fijo (todos los participantes reciben el mismo pago). Tanto la selección óptima, como la subóptima, de tierras para beneficios ambientales obtuvieron sustancialmente más beneficios ambientales que la selección aleatoria. Nuestros resultados sugieren que la selección rentable de tierras mediante el uso de pagos de conservación diferenciales puede mejorar sustancialmente la eficiencia de las inversiones del programa Grano-por-Verde y de otros programas de pago por servicios ecosistémicos.

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