LACEEP Working Paper Series WP78
Robalino-et-al-Park-Spillovers-LACEEP-WP78.Spillovers can significantly reduce or enhance the effects of land-use policies, yet there exists little rigorous evidence concerning their magnitudes. We examine how national parks within Costa Rica affect the clearing of forest nearby. We find that average deforestation spillover impacts are not significant within 0-5km and 5-10km rings around parks. However, we argue that this average blends multiple spillover effects, each of which is likely to vary in magnitude across the landscape, yielding varied net effects. We distinguish these effects using distances to roads and park entrances, given the importance of transport costs and, for Costa Rica, tourism. We find large and statistically significant leakage close to roads in areas without tourism, i.e., far from the park entrances. In contrast, no leakage is found far from roads or close to park entrances. In sum, the combination of low transport costs and low returns to forest is conducive to deforestation leakage around the parks.
Duke Environmental & Energy Economics Working Paper Series
Conservation and development agendas often are seen as in contradiction and, in the past, most forest policy was driven by only one such agenda. Yet leading conservation policies such as protected areas (PAs) increasingly are understood to vary in how development considerations are integrated, within PA types, given the starting point of conservation. Similarly, development policies such as logging concessions can integrate conservation. Sustainable forest management pushes integration from a starting point of development. One of the most visible initiatives of this type is the certification of logging concessions − such as by the Forest Stewardship Council (FSC) − to reduce various impacts of logging. The cost of sustainable management may lead a firm not to certify any given concession, yet the potential benefits could lead firms to voluntarily certify at least some concessions (including as perhaps firms could benefit from strategies that raise forest loss elsewhere). Our empirical analyses of two countries, Peru and Cameroon, aid in understanding what actually has happened in certified sites for the relatively ‘early days’ of such certifications. We control for unobserved factors’ influences over space and time, without which impact − sometimes perverse − is mistakenly attributed to FSC certification (FSCC). For Peru, we see no average FSCC deforestation impact in our study area (almost all concessions). One region, Madre de Dios, has an average reduction of 0.07% per year. For Cameroon, we find a small average FSCC deforestation impact of 0.02% per year in our study area (all concessions), though in four of five regions there is no statistically significant effect. We suggest that, as available data improve, more impact may be seen in some conditions.
Draft working paper, Duke University (part of a project supported by The Tinker Foundation).
While states pay landowners in the big payment-for-ecosystem-services (PES) programs, PES can be locally organized. Downstream actors, e.g., may offer incentives to upstream. Even − or especially? − with local organization, though, there may be negative reactions to the increased monitoring and sanctioning of behavior required to increase PES impact. Mexico’s forest agency (CONAFOR) has had limited average impacts per PES contract in its direct state payments but also, since 2008, a novel policy to help create new local PES. The Fondos Concurrentes (Matching Funds) program solicits applications − initiated by varied partners − that must include agreement between upstream and downstream groups. We consider the creation of local PES programs, involving coordination by those groups to establish a new institution, and effects of permitting sanctions on upstream behaviors. We use PES framing (services go downstream, payment up) of the contributions in a new assurance game that, in real time, links the groups − each of which confronts free riding. After our field pilot, we recruited 240 downstream and 240 upstream Fondos participants from Xalapa (Veracruz State), Merida (Yucatan State) or Cancun (Quintana Roo State). Initial trust-game behaviors align with participant perceptions and predict baseline giving in assurance (which is significant, despite a zero equilibrium, perhaps due to our sample). For upstream providers, i.e., those who get sanctioned, the threat and the use of sanctions increase contributions. Any ‘motivation crowding’ is not dominant during these sanctions. Downstream users contribute less when offered the option to sanction − as if that option signals an uncooperative upstream − then contributions rise in line with complementarity.
Duke Environmental & Energy Economics Working Paper Series
Incentives conditioned on socially desired acts such as donating blood, departing conflict or mitigating climate change have increased in popularity. Many incentives are targeted, excluding some of the potential participants based upon characteristics or prior actions. We hypothesize that pro-sociality is reduced by exclusion, in of itself (i.e., fixing prices and income), and that the rationale for exclusion influences such ‘behavioral spillovers’. To test this, we use a laboratory experiment to study the effects of a subsidy to donations when participants are fully informed about why they are selected, or not, for the subsidy. We study the effects of introducing different selection rules upon changes in donations. Selecting for the subsidy those who initially acted less pro-social (i.e., gave little to start) increased donations, while random subsidies and rewarding greater pro-sociality did not. Yet a selection rule which targets lower prior pro-sociality also intentionally excludes the people who donated more initially, and only that rule reduced donations by the excluded. This shows a tradeoff between losses from excluded participants and gains from selected.
Draft working paper, Duke University.
Over the last three decades, the first continuous road has been paved to connect northern South America’s Atlantic and Pacific coasts. The final sections of this Inter-Oceanic Highway are now being completed through the western Amazon Basin, a global biodiversity hotspot, at the triple-border of Brazil, Bolivia and Peru. Satellite images from 1989, 2000, and 2007 reveal accelerating clearing across the region, but the countries’ prior infrastructures governed their individual responses to the road. Brazilian deforestation slowed as the frontier expanded away from the highway with a network of capillary roads, but Bolivian clearing accelerated as its urban centers sprawled toward the road. Peru’s forests remain relatively intact, but similar trends isolated from Brazil suggest imminent acceleration as Peruvian infrastructural capacity increases.
Draft working paper, Duke University.
Ten years ago, Madagascar’s government committed to drastically scale up the nation’s protected-area coverage from ~3% to 10% of its area. We ask how successful this PA expansion is likely to be in terms of reducing deforestation (and, thereby, increasing the conservation of biodiversity). We statistically evaluate the impact of the prior generations of Malagasy PAs and use those results to anticipate the conservation impacts of Madagascar’s newest PAs. We find that deforestation was reduced by the prior PAs, although by less than suggested in simpler comparisons that lack explicit controls for land characteristics. Further, impacts are higher where deforestation pressure is higher, which often is closer to roads and cities (and which also may imply higher costs). We find Madagascar’s newest PAs are sited where, if managed correctly, they can achieve impacts at least as high as prior conservation.
Draft working paper, Duke University.
Incentives for REDD − i.e., reductions in emissions from deforestation and degradation − motivate application of static economic modeling of land use to assess heterogeneity over space in the business-as-usual baselines for land use required for forest policy evaluations. That some forested locations face higher threats is now recognized as an important factor in the evaluation and targeting of policy. Given this point − now often included in impact evaluation via matching − further theory is required to explain variations in policy impact. We show this need by analyzing impacts of Mexican protected areas (PAs) on land cover. Applying static land-use economics improves the baselines for our impact estimation and we find, on average, a 2.5% lower rate of 2000-05 natural land cover loss within the PAs. Stricter PAs appear closer to cities and have greater impact (4.4%) than less strict (2.3%), yet static baselines do not explain why. Nor do they explain why impact gradients by type differ across countries, or why PA spillovers vary across states − as we show for Mexico. We suggest an initial political economy model of impacts by type of PA and also provide examples of the economic and political dynamics required to understand PAs’ spillovers.
Draft working paper, Duke University.
The Selva Maya is an important tropical forest, the second biggest in the Americas after the Amazon and the largest continuous forest patch of the ‘Mesoamerican hotspot’ which contains around 7% of the world species . Located across Mexico, Belize and Guatemala, Selva Maya is subject to different policy, cultural and historical influences and to a grand road expansion program that will intersect its core . Given its biological importance and the environmental services it provides at a local and global scale, this region is a good case to consider road impacts. We focus on four questions: 1) what are the short and medium term effects of paved and unpaved roads investments on deforestation?; 2) do these impacts differ when roads are placed in areas with existing pressure vs. in less developed locations?; 3) do the effect of non-road drivers also vary with development contexts? We might expect that roads in previously pristine areas a new road will be the dominant predictor; and 4) using a different measure of context, do road impacts vary across the countries?
Environmental and Resource Economics (accepted)
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.
Philosophical Transactions B 2015 volume 370 (online http://dx.doi.org/10.1098/rstb.2014.0273)
The leading policy to conserve forest is protected areas (PAs). Yet, they are not a single tool: land users and uses vary by PA type; and public PA strategies vary in the extent of each type, as well as in the determinants of impact for each type, i.e. siting and internal deforestation. Further, across regions and time, strategies respond to pressures (deforestation and political).We estimate deforestation impacts of PA types for a critical frontier, the Brazilian Amazon. We separate regions and time periods that differ in their deforestation and political pressures and document considerable variation in PA strategies across regions, time periods and types. The siting of PAs varies across regions. For example, all else being equal, PAs in the arc of deforestation are relatively far from non-forest, while in other states they are relatively near. Internal deforestation varies across time periods, e.g. it is more similar across the PAtypes for PAs after 2000. By contrast, after 2000, PA extent is less similar across PA types with little non-indigenous area created inside the arc. PA strategies generate a range of impacts for PA types—always far higher within the arc—but not a consistent ranking of PA types by impact.
PLOS ONE 2015 (forthcoming) DOI:10.1371/journal.pone.0132590
Quasi-experimental methods increasingly are used to evaluate the impacts of conservation interventions by generating credible estimates of counterfactual baselines. These methods generally require large samples for statistical comparisons, presenting a challenge for evaluating innovative policies implemented within a few pioneering jurisdictions. Single jurisdictions often are studied using comparative methods, which rely on analysts’ selection of best case comparisons. The synthetic control method (SCM) offers one systematic and transparent way to select cases for comparison, from a sizeable pool, by focusing upon similarity in outcomes before the intervention. We explain SCM, then apply it to one local initiative to limit deforestation in the Brazilian Amazon. The municipality of Paragominas launched a multi-pronged local initiative in 2008 to maintain low deforestation while restoring economic production. This was a response to having been placed, due to high deforestation, on a federal “blacklist” that increased enforcement of forest regulations and restricted access to credit and output markets. The local initiative included mapping and monitoring of rural land plus promotion of economic alternatives compatible with low deforestation. The key motivation for the program may have been to reduce the costs of blacklisting. However its stated purpose was to limit deforestation, and thus we apply SCM to estimate what deforestation would have been in a (counterfactual) scenario of no local initiative. We obtain a plausible estimate, in that deforestation patterns before the intervention were similar in Paragominas and the synthetic control, which suggests that after several years, the initiative did lower deforestation (significantly below the synthetic control in 2012). This demonstrates that SCM can yield helpful land-use counterfactuals for single units, with opportunities to integrate local and expert knowledge and to test innovations and permutations on policies that are implemented in just a few locations.
PLOS ONE 2015 (forthcoming) DOI:10.1371/journal.pone.0129460
Protected areas are the leading forest conservation policy for species and ecoservices goals and they may feature in climate policy if countries with tropical forest rely on familiar tools. For Brazil’s Legal Amazon, we estimate the average impact of protection upon deforestation and show how protected areas’ forest impacts vary significantly with development pressure.We use matching, i.e., comparisons that are apples-to-apples in observed land characteristics, to address the fact that protected areas (PAs) tend to be located on lands facing less pressure. Correcting for that location bias lowers our estimates of PAs’ forest impacts by roughly half. Further, it reveals significant variation in PA impacts along development-related dimensions: for example, the PAs that are closer to roads and the PAs closer to cities have higher impact. Planners have multiple conservation and development goals, and are constrained by cost, yet still conservation planning should reflect what our results imply about future impacts of PAs.
Global Environmental Change 31 (2015) pp50-61
Although developing countries have established scores of new protected areas over the past three decades, they often amount to little more than ‘‘paper parks’’ that are chronically short of the financial, human, and technical resources needed for effective management. It is not clear whether and how severely under-resourced parks affect deforestation. In principle, they could either stem it by, for example, creating an expectation of future enforcement, or they could spur it by, for example, creating open access regimes. We examine the effect of Mexico’s natural protected areas (NPAs) on deforestation from 1993 to 2000, a period when forest clearing was rampant and the vast majority of protected areas had negligible resources or management. We use high-resolution satellite data to measure deforestation and (covariate and propensity score) matching to control for NPAs’ nonrandom siting and for spillovers. Our broad finding is that Mexico’s paper parks had heterogeneous effects both inside and outside their borders. More specifically, at the national-level, we cannot reject the null hypothesis that NPAs had zero average effect on clearing inside their borders, nor can we reject a similar hypothesis for spillover clearing outside their borders. However, we can detect statistically and economically significant inside- and outside-NPA effects for certain geographic regions. Moreover, these effects have different signs depending on the region. Finally, we find that NPAs with certain characteristics were more effective at stemming deforestation inside their borders, namely, those that were large, new, mixed use, and relatively well-funded. Taken together, these results suggest that paper parks have the potential to either reduce or exacerbate tropical deforestation and highlight the need for further research on the conditions that lead to each outcome.
Conservation Letters 2015 (online 9/28, doi 10.1111/conl.12201)
New infrastructure is needed globally to support economic development and improve human well-being. Investments that do not consider ecosystem services (ES) can eliminate these important societal benefits from nature, undermining the development benefits infrastructure is intended to provide. Such tradeoffs are acknowledged conceptually but in practice have rarely been considered in infrastructure planning. Taking road investments as one important case, here we examine where and what forms of ES information have the potential to meaningfully influence decisions by multilateral development banks (MDBs). Across the stages of a typical road development process, we identify where and how ES information could be integrated, likely barriers to the use of available ES information, and key opportunities to shift incentives and thereby practice. We believe inclusion of ES information is likely to provide the greatest development benefit in early stages of infrastructure decisions. Those strategic planning stages are typically guided by in-country processes, with MDBs playing a supporting role, making it critical to express the ES consequences of infrastructure development using metrics relevant to government decision makers. This approach requires additional evidence of the in-country benefits of cross-sector strategic planning and more tools to lower barriers to quantifying these benefits and facilitating ES inclusion.
PLoS ONE 10(4):e0124910 (2015) doi:10.1371/journal.pone.0124910
We estimate the effects on deforestation that have resulted from policy interactions between parks and payments and between park buffers and payments in Costa Rica between 2000 and 2005. We show that the characteristics of the areas where protected and unprotected lands are located differ significantly. Additionally, we find that land characteristics of each of the policies and of the places where they interact also differ significantly. To adequately estimate the effects of the policies and their interactions, we use matching methods. Matching is implemented not only to define adequate control groups, as in previous research, but also to define those groups of locations under the influence of policies that are comparable to each other. We find that it is more effective to locate parks and payments away from each other, rather than in the same location or near each other. The high levels of enforcement inside both parks and lands with payments, and the presence of conservation spillovers that reduce deforestation near parks, significantly reduce the potential impact of combining these two policies.
Ecological Economics 120 (2015) 416–429
How one treats others is important within collective action. We ask if resource scarcity in the past, due to its effects upon past behaviors, influences current other-regarding behaviors. Contrasting theories and empirical findings on scarcity motivate our framed field experiment. Participants are rural Colombian farmers who have experienced scarcity of water within irrigation. We randomly assign participants to groups and places on group canals. Places order extraction decisions. Our treatments are sequences of scarcities: ‘from lower to higher resources’ involves four rounds each of 20, 60, then 100 units of water; ‘from higher to lower resources’ reverses the ordering. We find that upstream farmers extract more, but a lower share, when facing higher resources. Further they take a larger share of higher resources when they faced lower resources in earlier rounds (relative to when facing higher resources initially). That is inconsistent with leading models of responses to scarcity which focus upon one’s own gain. It is consistent with lowering one’s weight on others to, for instance, rationalize having left them little. Our results suggest that facing higher scarcity can erode the bases for collective actions. For establishing new institutions, timing relative to scarcity could affect the probability of success.
Environmental Research Letters 9 (2014)
Protected areas (PAs) are the leading forest conservation policy, so accurate evaluation of future PA impact is critical in conservation planning. Yet by necessity impact evaluations use past data. Here we argue that forwardlooking plans should blend such evaluations with anticipation of shifts in threats. Applying improved methods to evaluate past impact, we provide rigorous support for that conceptual approach by showing that PAs’ impacts on deforestation shifted with land use. We study the Republic of Panama, where species-dense tropical forest faces real pressure. Facing variation in deforestation pressure, the PAs’ impacts varied across space and time. Thus, if shifts in pressure levels and patterns could be anticipated, that could raise impact.
Review of Environmental Economics and Policy, volume 7, issue 1, winter 2013, pp. 114–135 doi:10.1093/reep/res023
This article, which is part of a symposium on the economics of REDD, identifies three common settings for forest loss involving different types of decision-making agents that operate under different markets and institutions. That suggests using different theoretical frameworks for these three settings, which in turn generates different predictions concerning policies’ impacts. The first model, “producer profit maximization given market integration,” has been applied to many private decisions about the best locations for profitable land uses, such as agriculture and forest. Its predictions have been widely studied empirically, beginning no later than von Thunen (1826). The second model, “rural household optimization given incomplete markets and household heterogeneity,” has been applied to more isolated settings featuring high transactions costs that yield incomplete integration of households in input and output markets. Its policy impact predictions have been tested with surveys at household and village levels. In the third model, “public optimization given production and corruption responses by private firms,” a public agency determines public forest access by balancing public goods, public revenue needs, and private rents to award concessions. There is potential for corruption, and the decisions may be affected by decentralization. This model’s predictions can be tested using observed policies. We find that past policies rarely addressed the incentives driving forest loss effectively. This helps to explain the limited impact of past policies on deforestation and forest degradation. It also suggests directions for the design of future policies. In sum, the theory and the evidence suggest that REDD success requires an understanding of all the incentives that drive forest loss, so that domestic policy can be tailored to specific settings (i.e., relevant agents and institutions).
Ecological Economics 93 (2013) 301–312
As biomass fuel use in developing countries causes substantial harm to health and the environment, efficient stoves are candidates for subsidies to reduce emissions. In evaluating improved stoves’ relative benefits, little attention has been given to who received which stove intervention due to choices that are made by agencies and households. Using Chinese household data, we find that the owners of more efficient stoves (i.e., clean-fuel and improved-biomass stoves, as compared with traditional-biomass and coal stoves) live in less healthy counties and differ, across and within counties, in terms of household characteristics such as various assets. On net, that caused efficient stoves to look worse for health than they actually are.We control for counties and household characteristics in testing stove impacts. Unlike tests that lack controls, our preferred tests with controls suggest health benefits from clean-fuel versus traditional-biomass stoves. Also, they eliminate surprising estimates of health benefits from coal, found without using controls. Our results show the value, for learning, of tracking who gets which intervention.
Land Economics (2013) volume 89 (3): 432–448
We offer a nationwide analysis of the initial years of Costa Rica’s PSA program, which pioneered environmental-services payments and inspired similar initiatives. Our estimates of this program’s impact on deforestation, between 1997 and 2000, range from zero to one-fifth of 1% per year (i.e., deforestation is avoided on, at most, 2 out of every 1,000 enrolled hectares). The main explanation for such a low impact is an already low national deforestation rate. We also consider the effect of enrollment. Predicted deforestation on enrolled versus nonenrolled hectares, and matching analyses suggest an enrollment bias toward lower clearing threat. Enrolling land facing higher threat could raise payments’ impact on deforestation.
World Development 2014 volume 55, pp. 7–20
For Acre, in the Brazilian Amazon, we find that protection types with differences in governance, including different constraints on local economic development, also differ in their locations. Taking this into account, we estimate the deforestation impacts of these protection types that feature different levels of restrictions. To avoid bias, we compare these protected locations with unprotected locations that are similar in their characteristics relevant for deforestation. We find that sustainable use protection, whose governance permits some local deforestation, is found on sites with high clearing threat. That allows more avoided deforestation than from integral protection, which bans clearing but seems feasible only further from deforestation threats. Based on our results, it seems that the political economy involved in siting such restrictions on production is likely to affect the ability of protected areas to reduce emissions from deforestation and degradation.
Environment and Development Economics 19: 631–647
A national campaign of well testing through 2003 enabled households in rural Bangladesh to switch, at least for drinking water, from high-arsenic wells to neighboring lower arsenic wells. We study the well-switching dynamics over time by re-interviewing, in 2008, a randomly selected subset of households in the Araihazar region who had been interviewed in 2005. Contrary to concerns that the impact of arsenic information on switching behavior would erode over time, we find that not only was 2003–2005 switching highly persistent but also new switching by 2008 doubled the share of households at unsafe wells who had switched. The passage of time also had a cost: 22 per cent of households did not recall test results by 2008. The loss of arsenic knowledge led to staying at unsafe wells and switching from safe wells. Our results support ongoing well testing for arsenic to reinforce this beneficial information.
Land Economics 2013 89(2):308-329
We examine theoretically the emergence of participatory comanagement agreements that share between state and user the management of resources and the benefits from use. Going beyond user-user interactions, our state-user model addresses a critical question—when will comanagement arise?— in order to consider the right baseline for evaluating comanagement’s forest and welfare impacts. We then compare our model’s hypotheses concerning de facto rights, negotiated agreements, and transfers (all endogenous) with community-level data including observed agreements in a protected Indonesian forest. These unique data could refute the model, despite being limited, but instead offer support.
Environmental Science & Policy 26 (2013) 90-101
We assess how unequal information affects the bargaining within resource allocation, a stakeholder interaction that is critical for climate adaptation within the water sector. Motivated by water allocation among unequal actors in NE Brazil, within Ceara´ State, we employ ‘ultimatum’ field experiments in which one participant lacks information. We find that, despite having veto power, the less informed are vulnerable to inequity. When all are informed, we see a typical resource split (60% initiator–40% responder) that balances an initiator’s advantage with a responder’s willingness to punish greed. When instead responders have only a resource forecast upon which to base decisions, the fully informed initiators get 80% of resources for conditions of resource scarcity. Thus, despite each of the stakeholder types having an unquestioned ‘seat at the table’, information asymmetries make bargaining outcomes more unequal. Our results are widely relevant for adaptation involving the joint use of information, and suggest that equity can rise with dissemination of scientific outputs that are integral in adaptation.
Encyclopedia of Energy, Natural Resource, and Environmental Economics, (2013), vol. 2, pp. 144-149
Encyclopedia entry: reviews impacts of policies relevant for deforestation
Journal of Environmental Economics and Management 65 (2013) 225–240
We conducted a randomized controlled trial in rural Bangladesh to examine how household drinking-water choices were affected by two different messages about risk from naturally occurring groundwater arsenic. Households in both randomized treatment arms were informed about the arsenic level in their well and whether that level was above or below the Bangladesh standard for arsenic. Households in one group of villages were encouraged to seek water from wells below the national standard. Households in the second group of villages received additional information explaining that lower-arsenic well water is always safer and these households were encouraged to seek water from wells with lower levels of arsenic, irrespective of the national standard. A simple model of household drinking-water choice indicates that the effect of the emphasis message is theoretically ambiguous. Empirically, we find that the richer message had a negative, but insignificant, effect on well-switching rates, but the estimates are sufficiently precise that we can rule out large positive effects. The main policy implication of this finding is that a one-time oral message conveying richer information on arsenic risks, while inexpensive and easily scalable, is unlikely to be successful in reducing exposure relative to the status-quo policy.
Amer. J. Agr. Econ. 94(5): 1136–1153; doi: 10.1093/ajae/aas065
Farmers have to make key decisions, such as which crops to plant or whether to prepare the soil, before knowing how much water they will get.They face losses if they make costly decisions but do not receive water, and they may forego profits if they receive water without being prepared.We consider the coordination of farmers’ decisions, such as which crops to plant or whether to prepare the soil when farmers must divide an uncertain water supply. We compare ex-ante queues (pre-decision) to an ex-post spot market (post-decision & post-rain) in experiments in rural Brazil and a university in England. Queues have greater coordination success than does the spot market.
Oxford Review of Economic Policy, Volume 28, Number 1, 2012, pp. 164–179
Policies must balance forest conservation’s local costs with its benefits—local to global—in terms of biodiversity, the mitigation of climate change, and other eco-services such as water quality. The trade-offs with development vary across forest locations. We argue that considering location in three ways helps to predict policy impact and improve policy choice: (i) policy impacts vary by location because baseline deforestation varies with characteristics (market distances, slopes, soils, etc.) of locations in a landscape; (ii) different mixes of political-economic pressures drive the location of different policies; and (iii) policies can trigger ‘second-order’ or ‘spillover’ effects likely to differ by location. We provide empirical evidence that suggests the importance of all three considerations, by reviewing highquality evaluations of the impact of conservation and development on forest. Impacts of well-enforced conservation rise with private clearing pressure, supporting (i). Protection types (e.g. federal/state) differ in locations and thus in impacts, supporting (ii). Differences in development process explain different signs for spillovers, supporting (iii).
Journal of Development Economics 97 (2012) 427–436
We estimate neighbor interactions in deforestation in Costa Rica. To address simultaneity and the presence of spatially correlated unobservables, we measure for neighbors’ deforestation using the slopes of neighbors’ and neighbors’ neighbors’ parcels. We find that neighboring deforestation significantly raises the probability of deforestation. Policies for agricultural development or forest conservation in one area will affect deforestation rates in non-targeted neighboring areas. Correct estimation of the interaction reverses the naive estimate’s prediction of multiple equilibria.
Risk Analysis 2011 volume 31 number 1: 12-24 (doi 10.1111/j.1539-6924.2010.01479.x)
Private risk reduction will be socially efficient only when firms are liable for all the damage that they cause. We find that environmental insurance can achieve social efficiency even when two traditional policy instruments—ex post fines and risk management mandates with ex ante fines—do not. Inefficiency occurs with ex post fines, when small firms declare bankruptcy and escape their liabilities, limiting the incentives from this policy tool. Firms ignore mandates to implement efficient risk management because regulatory agencies do not have sufficient resources to monitor every firm. The evolution of the U.S. Environmental Protection Agency’s and states’ underground storage tank programs suggests that mandating environmental insurance can address inefficiency due to small firms declaring bankruptcy. Comparing insurance mandates to risk management mandates, the burden on a regulator is lower if all it has to do is to confirm that the firm has insurance rather than that the firm has actually, and effectively, implemented required management practices. For underground storage tanks, we show that insurance lowered toxic releases.