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Increasing the impact of collective incentives in payments for ecosystem services

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  • Kaczan, David
  • Pfaff, Alexander
  • Rodriguez, Luz
  • Shapiro-Garza, Elizabeth

Abstract

Collective payments for ecosystem services (PES) programs make payments to groups, conditional on specified aggregate land-management outcomes. Such collective contracting may be well suited to settings with communal land tenure or decision-making. Given that collective contracting does not require costly individual-level information on outcomes, it may also facilitate conditioning on additionality (i.e., conditioning payments upon clearly improved outcomes relative to baseline). Yet collective contracting often suffers from free-riding, which undermines group outcomes and may be exacerbated or ameliorated by PES designs. We study impacts of conditioning on additionality within a number of collective PES designs. We use a framed field-laboratory experiment with participants from a new PES program in Mexico. Because social interactions are critical within collective processes, we assess the impacts from conditioning on additionality given: (1) group participation in contract design, and (2) a group coordination mechanism. Conditioning on above-baseline outcomes raised contributions, particularly among initially lower contributors. Group participation in contract design increased impact, as did the coordination mechanism.

Suggested Citation

  • Kaczan, David & Pfaff, Alexander & Rodriguez, Luz & Shapiro-Garza, Elizabeth, 2017. "Increasing the impact of collective incentives in payments for ecosystem services," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 48-67.
  • Handle: RePEc:eee:jeeman:v:86:y:2017:i:c:p:48-67
    DOI: 10.1016/j.jeem.2017.06.007
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    More about this item

    Keywords

    D70; Q15; C92; Payments for ecosystem services; Collective action; Conditionality; Additionality; Mexico;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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