User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower
41 Pages Posted: 21 Feb 2009 Last revised: 16 Mar 2010
Date Written: March 12, 2010
Abstract
National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems can be mitigated by supplementing government financing with contributions from leading environmental service users. We use original survey data and official statistics to analyze user financing in Costa Rica’s renowned national PES program, focusing on the amounts and sources of user financing, the drivers of contributions, and contributors’ perceptions of the PES program. We find that user financing has supported less than three percent of the acres enrolled in the program and that hydroelectric plants are the largest private sector contributors. Large hydroelectric plants tend to contribute while small ones do not. The weight of evidence suggests that in addition to ensuring the provision of forest environmental services, hydroelectric plants’ motives for contributing to the PES program include improving relations with local communities and government regulators — common drivers of participation in all manner of voluntary environmental programs. These findings raise questions about the potential of user financing to improve the efficiency and financial sustainability of national PES programs.
Keywords: payments for environmental services, voluntary regulation, hydroelectricity, Costa Rica
JEL Classification: Q23, Q24, Q28
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism
By John W. Maxwell, Thomas P. Lyon, ...
-
Selling to Socially Responsible Consumers: The Private Provision of a Public Good
By Mark Bagnoli and Susan G. Watts
-
'Voluntary' Approaches to Environmental Regulation: A Survey
By Thomas P. Lyon and John W. Maxwell
-
Strategic Activism and Nonmarket Strategy
By David P. Baron and Daniel Diermeier
-
Strategic Activism and Non-Market Strategy
By Daniel Diermeier and David P. Baron
-
Greenwash: Corporate Environmental Disclosure Under Threat of Audit
By Thomas P. Lyon and John W. Maxwell
-
Self-Regulation, Taxation, and Public Voluntary Environmental Agreements
By Thomas P. Lyon and John W. Maxwell