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The Impact of Payments for Reforestation in the Mexican State Michoacán

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  • Cardona Santos, Elsa Maria
  • Willy, Daniel Kyalo
  • Holm-Müller, Karin

Abstract

As a means to adapt to climate change, the Mexican government grants, since 2003, payments as an incentive for landholders to conserve, maintain and increase the provision of environmental services through the promotion of a forestry strategy. This paper contributes to the literature with an empirical analysis of the impact of payments for reforestation in one of the states with the highest rates of deforestation, Michoac n. The impact is estimated by means of panel data regressions and propensity score matching. Our results suggest that the payments are not contributing to the overall reforestation in Michoac n because of the existence of leakage in areas that are not participating in the program. Our analysis underlines the challenges faced when implementing financial incentive based programs and provides policy makers with evidence for improving the design of such programs.

Suggested Citation

  • Cardona Santos, Elsa Maria & Willy, Daniel Kyalo & Holm-Müller, Karin, 2015. "The Impact of Payments for Reforestation in the Mexican State Michoacán," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113036, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113036
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    References listed on IDEAS

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    1. 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.
    2. Jennifer M. Alix-Garcia & Elizabeth N. Shapiro & Katharine R. E. Sims, 2012. "Forest Conservation and Slippage: Evidence from Mexico’s National Payments for Ecosystem Services Program," Land Economics, University of Wisconsin Press, vol. 88(4), pages 613-638.
    3. Pagiola, Stefano & Arcenas, Agustin & Platais, Gunars, 2005. "Can Payments for Environmental Services Help Reduce Poverty? An Exploration of the Issues and the Evidence to Date from Latin America," World Development, Elsevier, vol. 33(2), pages 237-253, February.
    4. 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.
    5. 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.
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    More about this item

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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