Conservation Auctions and Payments for Multiple Ecosystems Services:A Field Experiment in Oaxaca, MX

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“Conservation Auctions and Payments for Multiple Ecosystems Services:
A Field Experiment in Oaxaca, Mexico”
by
Pallab Mozumder
Professor, Dept. of Earth & Environment and the Dept. of Economics
Florida International University
David Barton Bray
Professor, Earth and Environment Department
Florida International University.

Abstract: Mexico has one of the most comprehensive PES (Payment for Ecosystem Services) programs globally. It is trying to reduce deforestation by placing forests on communal lands under PES contracts and has experimented with a carbon forestry program. Mexico is also working closely with the World Bank’s Forest Carbon Partnership Facility (FCPF) to take advantage of REDD+ initiative. During the formation of Mexico’s PES program, planners debated whether to select participants and communities through conservation auctions or flat-rate payment schemes. Given that the success of PES programs critically relies on the underlying institutions and incentive structures, in this study we report findings from a field experiment conducted in four communities in the Sierra Norte of Oaxaca, Mexico to examine the potential efficacy of conservation auction mechanism for four different PES programs (Mexico’s existing payment for hydrological services, Nicaragua’s silvopastoral program, Indonesia’s program for erosion control on coffee farms and a voluntary carbon forestry program similar to those in Chiapas or Oaxaca in Mexico). We randomly selected participants and allowed them to communicate with peers in some sessions (and not in some other sessions) for each auction. Our findings suggest that on average participants demand a higher willingness to accept (WTA) than the current payment amounts offered in the Mexico’s PES program and significant differences in WTA bid exist across different PES programs (e.g., erosion control, silvopastoral and carbon forestry practices). Results also suggest that communities are interested in a more diverse portfolio of PES programs and forest conservation policy could respond to broadening the number and type of PES programs offered to these communities.

Pallab Mozumder is a professor (with a joint appointment in the Dept. of Earth & Environment and the Dept. of Economics) at Florida International University (FIU), Miami, FL. He has received his PhD in Environmental and Natural Resources Economics from the University of New Mexico (2005). Before joining at FIU (2007), he spent two years as a Postdoctoral Fellow at The Environmental Institute (TEI), University of Massachusetts, Amherst. Recently in 2017-18, he was a Sabbatical Fellow at the Pardee Center for the Study of the Longer-Range Future at Boston University. Dr. Mozumder blends environmental economics, policy and management tools in interdisciplinary contexts to understand the vulnerability associated with climate change, extreme weather events and livelihood insecurity. The contribution of his research has been recognized by major funding agencies in the USA such as National Science Foundation (NSF), National Oceanic and Atmospheric Administration (NOAA), Department of Energy (DOE) etc.

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David Barton Bray is a professor in the Earth and Environment Department at Florida International University. He carries out research on community forest management in Mexico and Central America and pursues interests in natural resource and ecosystem management in Latin America. He received his PhD from Brown University in 1983. From 1986 to 1997 he was foundation representative with the Inter-American Foundation (IAF), a U.S. government foreign assistance agency, in Arlington, VA. With the IAF he worked in Paraguay, Argentina and Uruguay (1986-1989) and in Mexico 1989-1997. He is also a member of the Board of Directors of Ecologic Development Fund, a Cambridge, MA NGO. He is widely published in academic journals and journalistic outlets like the New York Time. In November 2020, he published Mexico’s Community Forest Enterprises: Success on the Commons and the Seeds of a Good Anthropocene (U. of Arizona Press)

For further information, please do not hesitate to contact Isabel Peña ( i.pena@cgiar.org )

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