Chapter20 - Chapter 20 Environmental Services Contents Categories of environmental services Targeting and policy design The Role of Correlation

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1 Chapter 20 Environmental Services Contents : Categories of environmental services Targeting and policy design The Role of Correlation Scale Effects Market Effects and Slippage Organizational structure and environmental services Multi-Objectives Political Economic Considerations Information Considerations Inhabitants Rights Categories of environmental services There are several categories of environmental services. Some useful typologies and partition of environmental services include: Pollution prevention, conservation, and amenity creation activities. Producers, in particular farmers, have established de facto rights to conduct certain activities that have negative environmental effect. These include application of chemicals that may harm water quality, fish and wild life, tillage practices that lead to soil erosion and build up of silt, and excessive irrigation that lead to water logging. Farmers may be paid to modify their activities and engage in sustainable practices. Many environmental services scheme are established to conserve resources, life styles, ecosystems etc. These include payment for preservation of forest resources and wetland, purchasing of “development rights” near cities to slow urban sprawl, payment to peasants to continue and plant and or raise traditional varieties and species, etc. A third category of policies aims at natural resources restoration and built up. They include payment for clean up activities, planting of forests, restoration of wetlands etc. Purchase of resources (or resource services) vs. payment for activities Some environmental services purchase resources or resource services. For example, producers may be paid for their water that will be used instead for, say, improving wetland or fishery conditions. Farmers may be paid for not farming their land and instead will be planted with cover crops or trees. Forest communities will be paid for not harvesting their forests etc. Another set of policies will pay producers for modifying their production activities. These are “working lands” programs that may pay farmers for desirable tillage practices, for instance not using certain chemicals, etc.
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2 Targeting and Policy Design A key issue in the design of an environmental service purchasing land is the determination of what to buy and how much to pay. Several considerations affect the “targeting” decisions. (1) Heterogeneity –There are differences in both environmental quality and cost of resources in different locations. For example, consider the case where we want to stop farming in a region so that native plants can be restored. The lands may vary, both in terms of agricultural productivity and in value of environmental products. These variations are reflected in the amount of purchasing funds willing to offer land at various locations. Suppose these are landowners in a region and let
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Chapter20 - Chapter 20 Environmental Services Contents Categories of environmental services Targeting and policy design The Role of Correlation

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