This project considers the effectiveness of Payments for Ecosystems Services (PES) programs in Costa Rica. PES programs are a rapidly proliferating conservation mechanism whereby landowners are paid for the "downstream" ecological benefits of their forested land. These programs are increasingly implemented worldwide, however, the conditions under which such payments produce new forms of forest cover are poorly understood. Knowing the extent to which payments for ecosystem services produces additional forest cover is critical for gauging the effectiveness of this program as payments that go toward status quo forms of land cover are an inefficient use of scarce conservation funds. Despite the importance of this issue, there remains a paucity of empirical work concerning the conditions under which ecosystem service payments actually produce additional forest cover among specific social groups. For example, little is known about the outcomes of PES among smallholding farmers that enroll in this program. In addition, the social conditions of agricultural production under which payments to smallholders can produce new forest cover remains poorly understood. This project will address these issues by evaluating whether PES is a viable mechanism for producing new forest cover among smallholding farmers in Costa Rica. Data on household land-use change will be collected through the use of participatory mapping exercises as well as interviews. In addition, smallholders who receive PES, and a control group of non-PES smallholders, will be asked to identify changes in their land using high-resolution remote sensing images and aerial photos at three different times. Data from a land-use survey will be used in order to analyze the extent to which PES has produced additional forest cover. A household livelihoods survey will be concurrently undertaken in which households are queried on their assets, expenditures, production, and income. Data from the household survey will be used to conduct a cost-benefit analysis in order to determine the types of land uses that have the most potential for PES to convert into forest. Survey data will also be used to construct regression models in order to identify the household characteristics that are likely to produce forms of land-use with the most potential for PES-induced forest conversion.

This project will provide new insights into the effectiveness of PES by empirically evaluating whether PES produces additional forest cover among smallholders. This research will also advance knowledge about the future potential of PES by delineating the specific on-the-ground conditions that allow for smallholder land uses that PES can potentially convert into forest. This research also has resonance beyond PES-specific scholarship as it will advance knowledge on tropical forest transitions by explicitly studying the complex policy and institutional context that shapes the land-use decisions of households. The project includes the participation of both graduate and undergraduate students and findings will be disseminated in the academic as well as the policy communities.

Project Report

This project had three intellectual goals: 1) evaluate the extent to which Costa Rica's payments for ecosystem services (PES) program is responsible for creating new forms of forest cover among smallholding farmers (farmers with less than thirty hectares); 2) assess the environmental, political, and economic factors that explain smallholder participation in the program; 3) understand the role PES plays in farmer livelihoods and the rural economy more broadly. Related to these goals, there are three significant findings from this research. First, the effectiveness of PES for producing forest cover among smallholders depends on the type of payment modality. Payments for forest conservation (ie. protecting existing stands of forest) are largely ineffective at promoting additional forest conservation with this group. Instead, such payments likely subsidize status quo patterns of forest cover. Payments for reforestation (eg. plantation forestry, agroforestry), however, appear to produce new forms of forest cover. Second, there are a number of household level factors that drive smallholders to enroll in the program, and a number of processes related to program governance that prevents some smallholders from enrolling. PES participants tend to be older households with significant sources of non-farm income, and have land on steeper slopes that are harder to farm. Such households also tend to have more land in fallow than non-PES participating households. These factors suggest that ecosystem service payments are utilized by smallholders with a limited engagement with agriculture, and that the payments are associated with increased agricultural abandonment. In addition, there are a number of bureaucratic constraints related to land titling that pose significant financial and legal barriers for some households to access this program. Finally, this research project examined how ecosystem service payments for reforestation are embedded within other sectors of the country’s economy. It found that payments for reforestation largely result in the production of low quality trees that are used for the production of wooden pallets for plantation agriculture. While PES for reforestation appears to be the only modality that produces new forest cover among smallholders, this type of payment ultimately serves as an indirect subsidy for export-oriented, plantation agriculture. Payments for ecosystem services is a conservation mechanism that is rapidly being adopted worldwide, yet its effectiveness at promoting new forest cover among specific social groups remains relatively unknown. For this reason, the study’s findings have a number of broader impacts for society. First, PES type programs are likely to include more smallholders in the future, and this research provides a guide to the kinds of payments that would be effective for creating new forms of forest cover for this group of land users. Second, the project’s findings expose a number of obstacles to a more inclusive payment program. A number of bureaucratic hurdles related to land titling prevent poor landowners from applying for PES, and the program largely appeals to relatively well-off smallholders that are only marginally engaged in agriculture. Such findings can provide more guidance to policy makers that are interested in targeting PES toward more marginalized rural landowners. Finally, the research project’s finding that payments for reforestation ultimately become an indirect support for plantation agriculture will contribute to policy debates over the overall environmental appropriateness of PES. If such payments largely support a carbon-intensive, environmentally problematic industry, then it raises critical questions about the true environmental gains of the program. The project also achieved a number of educational outcomes. The project worked closely with a Costa Rican forestry NGO (ASIREA) that helps smallholding farmers enroll in PES. The project results provided a typology of farmers most likely to enroll in the program in order to help this organization better target its efforts. The project was also conducted in collaboration with a Costa Rican academic institution (EARTH University) and provided training in household survey methods for nine undergraduate students at this institution. At the University of Maryland Baltimore County three undergraduate students were involved in data analysis, and they received training in GIS analysis and forest cover classification. In addition, one Master’s student at UMBC worked on data analysis, and the project provided the basis for a Master’s theses, which will be completed in Spring 2014.

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University of Maryland Baltimore County
United States
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