Collaborative Research: Spillovers in Incentive-Based Conservation Programs

Amherst College, Amherst MA

Investigators

Abstract

Intellectual merit: The proposed research will investigate how spillovers affect incentive-based forest conservation policies in a developing country context. Although economic theory shows that policies which pay landholders to maintain forest cover can generate additional conservation by raising the returns to forested land, it also suggests that these environmental benefits may be substantially undermined by "slippage," negative spillovers of deforestation to other locations. Conversely, benefits could be increased by positive spillovers occurring through knowledge transfers or strategic complementarities in production choices. Understanding the drivers and magnitude of such spillovers is therefore crucial for the design of future incentive-based conservation policies. Incentive-based policies for forest conservation are expected to expand dramatically under proposed international agreements to reduce carbon emissions and to establish markets for carbon offsets. Most of the low-cost opportunities for reducing carbon emissions will occur in developing countries, but to date there is little research modeling or quantifying incentive-based forest conservation in a developing country context. In contrast to industrialized countries, developing regions are likely to have larger credit constraints, increased land or labor market rigidity, more localized markets due to poor infrastructure, and greater informational barriers. These differences are likely to affect the degree, location, and type of spillovers but have not been adequately studied. In response to this gap in knowledge, the proposed research will: 1. Develop theoretical models of spillovers in a developing country context; 2. Investigate the validity of these theories using new spatially-explicit program and field survey data on Mexico's National Payments for Environmental Services program; and 3. Develop methods to estimate environmental and socioeconomic impacts of incentive-based conservation in the presence of spillovers. Broader impacts: The proposed research has several broader impacts. First, the economic theories developed will have important implications for policy design in Mexico and globally. Understanding how incentive-based conservation efforts are affected by spillovers is critical to the creation of future policies, which are currently being promoted by international conservation and development agencies and will likely expand under new international climate agreements. Second, the project will forge long-term research partnerships and networks between international colleagues in Mexico and the U.S., strengthening crossborder research and policy efforts and broadening the participation of underrepresented groups. Spanishspeaking students from both countries will be encouraged to participate as research associates and the team's female leadership will provide positive role models and mentoring opportunities. Third, the project will integrate research and education by providing research opportunities for graduate and undergraduate students and by developing new curricular material. The case study of Mexico's program will be used as a teaching tool for undergraduate, masters, and doctoral students in economics and environmental studies. The data will be of future use for a broad set of theoretical and empirical research about incentive-based conservation. The project will also have interdisciplinary broader impacts. Measuring conservation spillovers requires the development of new remote sensing methodologies and tools to measure land-use change. These techniques will be of use to researchers in a variety of disciplines and are directly relevant to ongoing global efforts to create a cost-effective system of measuring and monitoring carbon emissions.