Erwin H. Bulte

Payments for ecosystem services and poverty reduction: concepts, issues, and empirical perspectives

Paying for the provision of environmental services is a recent policy innovation attracting much attention in both developed and developing countries. This innovation, referred to as ‘payments for ecosystem services’ (when the emphasis is on enhancing ‘nature’ services) or ‘payments for environmental services’ (when amenities provided by the built environment are also included) is referred to here as PES. PES programs aim to harness market forces to obtain more efficient environmental outcomes. Since so many opportunities for PES programs could involve farmers in poor regions, international aid agencies and private donors, looking for a double dividend, increasingly consider using PES programs as a potential way of meeting both social and environmental objectives.

Biological Pollution Prevention Strategies under Ignorance:The Case of Invasive Species

Invasive alien species (IAS)—species that establish and spread in ecosystems to that they are not native—are argued to be the secondmost important cause of biodiversity loss worldwide (Holmes). Without natural predators, parasites, and/or pathogens to help control population growth, IAS frequently outcompete or prey on native species. They cause or spread diseases to cultivated plants, livestock and human populations. They often encroach on, damage or degrade assets (e.g., power plants, boats, piers, and reservoirs). The associated economic impacts can be significant (Perrings, Williamson, and Dalmazzone). For example, the zebra mussel alone is predicted to create

Income inequality and the environment: aggregation bias in environmental Kuznets curves

5 billion in damages over the next decade in the Great Lakes (Michigan Department of Environmental Quality). Human activities—particularly those associated with trade and travel—are the most common cause of IAS invasions. IAS invasions are now more frequent than ever before, largely due to the expansion of world trade and travel over the past century (Heywood, Parker et al.). For instance, at least 145 species have invaded the Great Lakes since the 1830s, with one-third

WHY COMPENSATING WILDLIFE DAMAGES MAY BE BAD FOR CONSERVATION

Abstract The environmental Kuznets curve assumes an inverted U-shaped relation between environmental damage and per capita income. Recently it has been argued in the literature that in addition to income levels, the inequality in the distribution of power and income is (positively) related to environmental degradation. We provide an additional argument, based on simple aggregation, for including a measure of income dispersion in empirical analyses. When the relationship between environmental damage and household income is concave (e.g. resembles an environmental Kuznets curve), then income inequality is negatively related to total environmental damage. Results from an empirical analysis of cross-national variation indicate that the aggregation effect can run counter to and outweigh the political economy effect for some environmental indicators.

A Dark Side of Social Capital? Kinship, Consumption, and Savings

Abstract In an effort to attenuate human–wildlife conflict and promote conservation of charismatic megafauna, compensation programs for wildlife damages have been implemented in many countries. Compensating pastoralists and farmers for damage caused by wildlife reduces hunting pressure on wild animal populations. However, it can also lead to a decrease in efforts to prevent damage and exacerbate conflicts with wildlife. Furthermore, compensation programs increase the return to agriculture and can therefore be viewed as a subsidy toward crop and livestock production. Such subsidies can trigger agricultural expansion (and habitat conversion), an inflow of agriculture producers, and intensification of agricultural production. Each of these impacts is shown to have potentially adverse effects on the wildlife population that compensation intends to favor. In some circumstances, the net effect on the wildlife stock could be negative. This calls for a careful assessment of local ecological and economic conditions before compensation is implemented. Incentive mechanisms that are directly tied to conservation outcomes (e.g., payments to locals based on the size of the wildlife population) should be considered instead of compensation programs.

Preference Uncertainty in Non-Market Valuation: A Fuzzy Approach

Abstract We explore whether traditional sharing norms in kinship networks affect consumption and accumulation decisions of poor black households in KwaZulu-Natal, South Africa. Using a proxy for the number of family dependents, our results are consistent with the interpretation that households try to evade their ‘sharing obligations’ by (i) accumulating durables that are non-sharable at the expense of durables that may be shared and (ii) reducing savings in liquid assets. By attenuating accumulation incentives, kinship sharing may come at the expense of income growth – if so, a culturally-induced poverty trap can possibly eventuate. We demonstrate tentative evidence that more extensive kinship networks are associated with lower incomes.

Economics of Antipoaching Enforcement and the Ivory Trade Ban

In this article, we consider uncertain preferences for non-market goods, but we move away from a probabilistic representation of uncertainty and propose the use of fuzzy contingent valuation. We assume that a decision maker never fully knows her own utility function and we treat utility as a fuzzy number. The methodology is illustrated using data on forest valuation in Sweden. Fuzzy contingent valuation provides estimates of resource value in the form of a fuzzy number and includes estimates obtained using a standard probabilistic approach. Copyright 2001, Oxford University Press.

Environmental degradation in developing countries: households and the (reverse) Environmental Kuznets Curve

A model of elephant conservation that includes illegal poaching, enforcement effort, and legal culling is used to analyze enforcement and elephant populations for alternative policies, with and without legal trade in ivory. Consistent with previous theoretical models, banning trade may increase or decrease equilibrium stocks. As an empirical application, information for Zambia, along with sensitivity analysis, are used to show that the ivory trade ban is more effective in conserving the African elephant (Loxodonta africana) than in permitting open trade. However, in all situations, current elephant populations likely exceed optimal levels as perceived by the range states, and further reductions in elephant numbers might be expected. Copyright 1999, Oxford University Press.

Marginal Valuation of Charismatic Species: Implications for Conservation

Abstract We propose an alternative explanation for the inverted U-shape relationship between income and environmental degradation. In developing countries, production and consumption patterns of (rural) households are the main cause of environmental damage. With a conventional household model, we demonstrate that the so-called Environmental Kuznets Curve may arise when the restrictive assumption of a set of perfect markets for factors and commodities is relaxed. Depending on the criterion or indicator that is used to represent environmental pressure, however, we demonstrate that the reverse may also hold. This finding highlights the importance of selecting the appropriate dependent variable in regression analyses.

Forest Conservation in Costa Rica when Nonuse Benefits are Uncertain but Rising

Most contingent valuation studies focus on total willingness to pay (WTP) as a measure of welfare change. For policy involving species preservation, however, it is important to distinguish between the benefits of preventing a species from going extinct and the benefits of preserving numbers above the minimum viable population (MVP) level. Once MVP is exceeded, marginal WTP becomes relevant. These propositions are illustrated for the case of one charismatic species whose management is much debated, minke whales in the Northeast Atlantic Ocean. It is shown that, for a given estimate of total preservation value, strict conservation and extinction can both be optimal. This finding highlights the importance of collecting marginal values in contingent valuation surveys.