Quarterly Journal of International Agriculture No. 4/06
Payments for environmental services in Costa Rica: increasing efficiency through spatial differentiation
Tobias Wünscher
Center for Development Research (ZEF), Bonn, Germany
Stefanie Engel
ETH Zurich, Switzerland
Sven Wunder
Center for International Forestry Research (CIFOR), Belem, Brazil
Abstract
Costa Rica was the first developing country to have implemented a
nation-wide program of payments for environmental services. We analyze
whether the efficiency of the program could be increased through better
targeting techniques and propose a targeting mechanism which takes into
account the spatial diversity of service provision and opportunity
cost. Given a fixed budget we show that selecting sites according to
their service delivery potential increases the amount of contracted
services. The efficiency increase is even more pronounced when
opportunity costs are taken into account and payment levels are varied
accordingly. We also observe that the use of the above mentioned
concepts decreases the average area of the selected, sites which might
indicate that the proposed approaches encourage participation of the
poor.
Keywords: conservation, payment, environmental services, targeting, Costa Rica
JEL: Q23, Q57
Vol. 45 (2006), No. 4: 319-337