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Analysis of the cost-effectiveness for ecosystem service provision and rural income generation: a comparison of three different programs in Southern Ecuador

Abstract

In recent years, new tools for funding nature conservation have been designed. Because poverty is often significant in areas with high biodiversity, the improvement of local livelihoods is frequently considered as a secondary goal of new financing mechanisms besides nature conservation. The buffer zone of the Podocarpus National Park in Ecuador is such a high biodiversity zone. In this paper, we compare the cost-effectiveness and development potential of three different mechanisms to finance nature conservation implemented in this buffer zone, namely (a) an organic coffee label, (b) the Socio Bosque Program, a nationwide payment scheme for private forest conservation, and (c) FORAGUA, a regional water fund. This paper describes the functioning and the scope of the mechanisms and analyses their environmental and socio-economic impacts which are compared to the total costs. Results show that the water fund has the highest additionality in ecosystem service provision, while the payment scheme is the most cost-effective both for current as for increased ecosystem service provision and for extra rural job creation. Organic coffee certification has the highest positive impact on rural income creation.

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Notes

  1. A contact list of people working on ES in Ecuador was developed. It comprised 25 researchers from Ecuadorian universities and project managers working for NGOs and the government. Of the 25 researchers contacted, 10 completed the ESI individually and five did it together.

  2. One coffee producer also participates in the Socio Bosque Program.

  3. Standard deviations: income coffee association: 662; income coffee intermediary: 343; non-coffee household farm income: 2,222; households’ off-farm income: 4,417.

  4. Total current profit coffee: US$ 26,605; total coffee profit selling the total harvest to intermediaries: US$ 19,197.

  5. For coffee 37 families use 51 ha of land; for Socio Bosque seven families use 991 ha of land.

  6. The difference between weeding costs for both groups is significant at the 1 % level (p value is 0.000 with Independent samples Mann–Whitney test). Details of this calculation can be obtained from the leading author.

  7. One bag of coffee weighs approximately 46 kg.

  8. Coffee farmers previously produced coffee following the dry processing system, where coffee beans are harvested and dried in the sun. To sell organic coffee, farmers had to switch to wet processing. In this system, coffee berries are pulped, fermented, washed and then dried in special infrastructure. Although this process is not specific to organic coffee (see e.g. specialty coffees), this shift was a necessary condition to be able to sell organically certified coffee. The (high) start-up costs thus include both the costs of changing from dry to wet processing as the shift from conventional to organic coffee.

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Acknowledgments

This research was made possible thanks to funding from the Flemish Interuniversity Council—University Development Cooperation. The authors would like to thank Arturo Quevedo, Eduardo Rengel, Jaime Toro, Jean-François Le Coq, José Romero, Juan Carlos Cevallos, Nelson Salinas, and the people from Colinas Verdes. The authors would also like to thank the anonymous reviewers for their valuable input provided for this paper.

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Correspondence to Leander Raes.

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Raes, L., Aguirre, N., D’Haese, M. et al. Analysis of the cost-effectiveness for ecosystem service provision and rural income generation: a comparison of three different programs in Southern Ecuador. Environ Dev Sustain 16, 471–498 (2014). https://doi.org/10.1007/s10668-013-9489-2

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  • DOI: https://doi.org/10.1007/s10668-013-9489-2

Keywords

  • Cost-effectiveness
  • Eco-label
  • Ecosystem services
  • Indicators
  • PES
  • Rural
  • Development