Séminaire du CIRED : Julie Subervie (INRAE, CEEM)

Abstract

Payments for Environmental Services (PES) have become a popular forest conservation tool in recent years, with numerous new schemes springing up around the world, particularly in developing countries. However, more often than not, the effectiveness of PES contracts is minimal, because conservation buyers know less than landowners do about the costs of contractual compliance. Auction mechanisms can be used to make ex-ante estimates of the payments needed to save the forests. This study reports results from an experimental auction which uses the Becker-DeGroot-Marschak (BDM) mechanism to estimate Brazilian Amazon forestland owners’ willingness to accept (WTA) PES contracts at different forest conservation thresholds. We found that the average WTA is low, relative to the social cost of carbon and that the farmers tend to bid higher in a PES auction that offers less flexible contracts, i.e. with the most difficult to achieve environmental targets. We also found that less flexible PES contract may well be most cost-effective ultimately, as the conservation buyer saves money on broken contracts.