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Tag: incentives

Graduated stringency within collective incentives for group environmental compliance: Building coordination in field-lab experiments with artisanal gold miners in Colombia

Luz A. Rodriguez, Alexander Pfaff, Maria Alejandra Velez
Journal of Environmental Economics and Management 98 https://doi.org/10.1016/j.jeem.2019.102276

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Small-scale gold mining is important to rural livelihoods in the developing world but also a source of environmental externalities. Incentives for individual producers are the classic policy response for a socially efficient balance between livelihoods and the environment. Yet monitoring individual miners is ineffective, or it is very costly, especially on frontiers with scattered small-scale miners. We ask whether monitoring at a group level effectively incentivizes cleaner artisanal mining by combining lower-cost external monitoring with local collective action.We employ a mining-framed, threshold-public-goods experiment in Colombia’s Pacific region, with 640 participants from frontier mining communities. To study compliance with collective environmental targets, we vary the target stringency, including to compare increases over time in the stringency versus decreases. We find that collective incentives can induce efficient equilibria, with group compliance — and even inefficient overcompliance — despite the existence of equilibria with zero contributions. Yet, for demanding targets in which the reward for compliance barely outweighs the cost, compliance can collapse. Those outcomes improve with past successes for easier targets, however, so our results suggest gain from building coordination via graduated stringency.

 

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Spillovers from Targeting of Incentives: exploring responses to being excluded

Francisco Alpizar, Anna Norden, Alexander Pfaff, Juan Robalino
Journal of Economic Psychology 59:87-98 http://dx.doi.org/10.1016/j.joep.2017.02.007

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A growing set of policies involve transfers conditioned upon socially desired actions, such as attending school or conserving forest. However, given a desire to maximize the impact of limited funds by avoiding transfers that do not change behavior, typically some potential recipients are excluded on the basis of their characteristics, their actions or at random. This paper uses a laboratory experiment to study the behavior of individuals excluded on different bases from a new incentive that encourages real monetary donations to a public environmental conservation program. We show that the donations from the individuals who were excluded based on prior high contributions fell significantly. Yet the rationale used for exclusion mattered, in that none of the other selection criteria used as the basis for exclusion resulted in negative effects on contributions.

 

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Unintended Effects of Targeting an Environmental Rebate

Francisco Alpizar, Anna Norden, Alexander Pfaff, Juan Robalino
Environmental and Resource Economics DOI 10.1007/s10640-015-9981-2

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When designing schemes such as conditional cash transfers or payments for ecosystem services, the choice of whom to select and whom to exclude is critical. We incentivize and measure actual contributions to an environmental public good to ascertain whether being excluded from a rebate can affect contributions and, if so, whether the rationale for exclusion influences such effects. Treatments, i.e., three rules that determine who is selected and excluded, are randomly assigned. Two of the rules base exclusion on subjects’ initial contributions. The third is based upon location and the rationales are always explained. The rule that targets the rebate to low initial contributors, who have more potential to raise contributions, is the only rule that raised contributions by those selected. Yet by design, that same rule excludes the subjects who contributed the most initially. They respond by reducing their contributions even though their income and prices are unchanged.

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Assessing the impact of institutional design of Payments for Environmental Services: the Costa Rican experience

Juan Robalino, Alexander Pfaff, Laura Villalobos
B. Rapidel, F. DeClerk, J. LeCoq and J. Beer Eds. “Ecosystem services from Agriculture and Agroforestry: Measurement and Payment”. Chapter 14. Earthscan Press.

PDF link iconin Costa Rica. The first years of implementation set the basis for what the programme has become. Important changes have been made since the beginning, such as the institution in charge of implementing the programme, parcels selection criteria, and new offices that were opened in different areas of the country with the objective of reducing application costs. Using 2003 as the starting point of when these changes took place, we discuss if they had a programme efficiency effect on reducing deforestation. We focus on forest conservation contracts because it is the most important category of the programme in terms of budget and amount of land enrolled. We use matching techniques, geographic information systems (GIS), characterize the areas where payments were implemented in each of the time periods using a long list of variables, and look for similar areas that did not receive payments. We find that, as other studies have found for this period (Robalino et al, 2008; Arriagada, 2008), the impacts are low but significant. While it seems that, overall, institutional changes have not had a significant effect on impact, we also look at the impacts of forest conservation contracts per office. We find that those offices located in areas with high deforestation tend to have higher impacts.

 

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Costa Rica’s Payment for Environmental Services Program: Intention, Implementation, and Impact

G. Arturo Sanchez-Azofeifa, Alexander Pfaff, Juan Robalino, Judson Boomhower
Conservation Biology 2007 volume 21, number 5, 1165–1173

PDF link iconWe evaluated the intention, implementation, and impact of Costa Rica’s program of payments for environmental services (PSA), which was established in the late 1990s. Payments are given to private landowners who own land in forest areas in recognition of the ecosystem services their land provides. To characterize the distribution of PSA in Costa Rica, we combined remote sensing with geographic information system databases and then used econometrics to explore the impacts of payments on deforestation. Payments were distributed broadly across ecological and socioeconomic gradients, but the 1997–2000 deforestation rate was not significantly lower in areas that received payments. Other successful Costa Rican conservation policies, including those prior to the PSA program, may explain the current reduction in deforestation rates. The PSA program is a major advance in the global institutionalization of ecosystem investments because few, if any, other countries have such a conservation history and because much can be learned from Costa Rica’s experiences.

 

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Will buying tropical forest carbon benefit the poor? evidence from Costa Rica

Alexander Pfaff, Suzi Kerr, Leslie Lipper, Romina Cavatassi, Benjamin Davis, Joanna Hendy, G. Arturo Sanchez-Azofeifa
Land Use Policy 24 (2007) 600–610

PDF link iconWe review claims linking both payments for carbon and poverty to deforestation. We examine these effects empirically for Costa Rica during the late 20th century using an econometric approach that addresses the irreversibilities in deforestation. We find significant effects of the relative returns to forest on deforestation rates. Thus, carbon payments would induce  conservation and also carbon sequestration, and if land users were poor could conserve forest while addressing rural poverty. We note that the poor appear to be marginalized in the sense of living where land profitability is lower. Those areas also have more forest. We find that poorer areas may have a higher supply response to payments, but even without this effect poor areas might be included and benefit more due to higher (per capita) forest area. They might be included less due to transactions costs, though. Unless the Clean Development Mechanism of the Kyoto Protocol is modified in its implementation to allow credits from avoided  deforestation, such benefits are likely to be limited.

 

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