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  Airbnb : Global phenomenon, local conversation. A study of the environmental, economic, and social impacts of airbnb on the Monteverde area

  A study of the environmental, economic, and social impacts of Airbnb on the Monteverde area.

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  Grey water

  Barton, Susannah; Hughes, Brian; Rossier, Erin; and Reiter, Jesse

  Grey water is made up of waste water from showers, bathroom sinks and laundry machines. Grey water does not include waste water from toilets. If properly collected and stored grey water can be reused for different purposes such as landscape irrigation.

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  ¿Mi casa es su casa? The impact of airbnb on the Monteverde community

  Deena Blum, Madeleine DesFosses, Ilana Heller, Rachel Luce, Talia Michaud, Beau Ngu, Molly Sutter, and Eleanor Zelek

  We are have been studying in Monteverde since january living with host families, and this experience has been great in allowing us to better connect with the community. Our research is continuation of research was start last year on topic that many in Monteverde have been interesting. For alot of us this project has uncovered many important aspects of Airbnb. Intitially i thought the platform was cheaper alot alternative when traveling that was also good way to make money, but it’s so much more. This presentation will be about 75 minutes followed by questions and a break at 10:15.

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  ¿Mi casa es su casa? The impact of airbnb on the Monteverde community

  Deena Blum, Madeleine DesFosses, Ilana Heller, Rachel Luce, Talia Michaud, Beau Ngu, Molly Sutter, and Eleanor Zelek

  We are have been studying in Monteverde since january living with host families, and this experience has been great in allowing us to better connect with the community. Our research is continuation of research was start last year on topic that many in Monteverde have been interesting. For alot of us this project has uncovered many important aspects of Airbnb. Intitially i thought the platform was cheaper alot alternative when traveling that was also good way to make money, but it’s so much more. This presentation will be about 75 minutes followed by questions and a break at 10:15.

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  Forests and integrated water resources management, DFID forestry research on forest and water interactions

  Calder, Ian R.

  The public perception that forests are, in all circumstances, necessarily good for the water environment, that they increase rainfall, increase runoff, regulate flows, reduce erosion, reduce floods, “sterilize” water supplies and improve water quality, has long been questioned by the scientific community. Although this simplistic public perception has been debated since the nineteenth century (Saberwal, 1997) and a large literature is available on the debate, the evolving “modern” science perception (the reader is referred to reviews by Bosch and Hewlett (1982), Hamilton and King (1983), Hamilton (1987), Bruijnzeel (1990), Calder (1992), particularly as regards tropical forests, and the more recent reviews, in the light of new studies, by Calder (1999, 2000) and Bruijnzeel (2001, 2002)) suggests a more complex and generally less advantageous functioning of forests in relation to the water environment. In a world where increasing demands are being made on water resources for food production, for domestic consumption, for industrial use and for ecological purposes, there is a greater awareness that the costs of the generally higher water use of forests as compared with other vegetation types needs to be evaluated in relation to their benefits for timber and conservation, amenity recreation and environment (CARE) products and for supporting livelihoods. Financing mechanisms which are directed at conserving environmental services and protecting indigenous forests, and which may also serve to provide compensation payments to inhabitants of upper water catchments, are being promoted in many regions of the world. But for these mechanisms to be sustainable and defensible requires that the disparity between the public and science perceptions of the role of forest needs to be addressed and also that the bio-physical and socio-economic impacts of changing land use and forest cover are understood.

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  Land-water linkages in rural watersheds case study series. Cooperation between a small private hydropower producer and a conservation NGO for forest protection: The case of La Esperanza, Costa Rica

  Rojas, Manrique and Aylward, Bruce

  This Case Study focuses on a cooperation mechanism developed in Costa Rica between La Esperanza Hydropower Project (downstream water user) and the Monteverde Conservation League, a conservation NGO that owns most of the hydropower plant’s upper catchment. The objective of the mechanism is to ensure the conservation of forest cover where it already exists, since forests are perceived to provide a range of downstream hydrological services for which the hydropower producer is willing to pay. The mechanism is centered on a private contract between two parties, where the hydropower producer commits to paying the forest owner in exchange of the latter’s commitment to maintain the forest cover on its property. The payment increases through the first five years of the contract from US$ 3 to US$ 10/ha/yr, and from the fifth year onwards US$ 10/ha/yr is used as a reference value in a formula that factors in power produced and the tariff at which the power is sold. Under the agreement, the hydropower producer makes payments to 3 000 ha in the watershed, which is equivalent to 88 percent of the total area. The contract was signed for 99 years. This payment for environmental services (PES) scheme represents a considerable increase in the O&M costs of the power plant (approximately a 21 percent increase) and is a significant contribution to the annual budget of the conservation NGO (approximately 10- 25 percent of the annual budget)

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  What are we learning from experience with markets for environmental services in Costa Rica? A review and critique of the literature

  Manrique Rojas and Bruce Aylward

  The use of markets and payments for environmental services is a topic gaining increasing attention amongst policy-makers and environment and development practitioners around the globe. Simply put, the term ‘environmental services’ can be taken to refer to the overall concept of natural systems providing a continuous flow of valuable goods and services to society. This is in contrast to similar services provided by man-made physical infrastructure and technological capital (i.e. water treatment, artificial fertilization, genetic modification) for which these environmental services are a substitute. The use of market mechanisms as a means of incorporating the economic value of these environmental services into the financial decision-making of producers and consumers is an additional tool that can be employed to resolve longstanding market failures that lead to less than desirable economic outcomes – i.e. having fewer environmental services and paying more for their man-made substitutes. In the developing world, Costa Rica has led efforts to experiment with the application of these mechanisms, many of which were simply ideas on paper just a few years ago. A survey of markets for environmental services by IIED highlights the formative role Costa Rica has played and provides a rich characterization of the economics of these initiatives in a global context (Landell-Mills and Porras 2002). As a complementary effort, this paper digs deeper into the literature regarding the Costa Rica experience in an effort to see what we are learning from the experience: how has technical, scientific and economic information on environmental services fed into these initiatives? To what extent are these initial experiences being monitored and evaluated? Is there a feedback loop that connects these experiences with learning about environment and development issues, particularly in the local context of policy-making within the country? The principal objective of the literature review is to identify and review documents and other material that address the following: 1. the local origins of the concept of payments and markets for environmental services and how they have developed over time, particularly in relation to the broader international development of the concept and local necessities/realities (historical and trend analysis); 2. the types of existing initiatives related to markets for environmental services, and who is participating in such initiatives (descriptive work); 3. the knowledge base that underpins market development, i.e. the extent to which markets are based on specific scientific and technical knowledge regarding the biophysical, economic and social relationships involved as opposed to general views on the subject (critical assessment); 4. the initiatives undertaken and underway to date with respect to the monitoring and evaluation of the experience with payments and markets for environmental services and to what extent (and with what results) the literature assesses these initiatives in terms of economic efficiency, environmental effectiveness, and social equity and/or poverty reduction. Where written material is not available or does not provide comprehensive coverage, interviews with those involved in these initiatives were used to supplement the documentary evidence. Given that IIED has undertaken a thorough review of the global literature on this topic and identified the examples emerging from Costa Rica, objectives 1 and 2 draw heavily on the existing IIED work by attempting to cross-check, confirm and, where possible, expand the coverage (in number and depth) of existing cases of markets and payments. The added value of the literature review will be in the deepening of the knowledge base and analysis of its content with respect to objectives 3 and 4. This in turn provides a basis for charting a way forward. The paper is organized to cover the objectives one by one. In the first chapter the local origins of the concept of markets and payments for environmental services in Costa Rica is explored. The paper then turns to the experiences (or market cases) gained so far in the country, providing in each of the succeeding chapters a description and review of each of the cases, an assessment of the role of knowledge in the development and formulation of the initiatives and a report on monitoring and evaluation underway to date. The paper concludes by drawing out some of the lessons learned and making recommendations regarding practical steps that other countries, researchers and financing organizations might take to improve the process of launching such initiatives in the future.

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  What are we learning from experience with markets for environmental services in Costa Rica? A review and critique of the literature

  Manrique Rojas and Bruce Aylward

  The use of markets and payments for environmental services is a topic gaining increasing attention amongst policy-makers and environment and development practitioners around the globe. Simply put, the term ‘environmental services’ can be taken to refer to the overall concept of natural systems providing a continuous flow of valuable goods and services to society. This is in contrast to similar services provided by man-made physical infrastructure and technological capital (i.e. water treatment, artificial fertilization, genetic modification) for which these environmental services are a substitute. The use of market mechanisms as a means of incorporating the economic value of these environmental services into the financial decision-making of producers and consumers is an additional tool that can be employed to resolve longstanding market failures that lead to less than desirable economic outcomes – i.e. having fewer environmental services and paying more for their man-made substitutes. In the developing world, Costa Rica has led efforts to experiment with the application of these mechanisms, many of which were simply ideas on paper just a few years ago. A survey of markets for environmental services by IIED highlights the formative role Costa Rica has played and provides a rich characterization of the economics of these initiatives in a global context (Landell-Mills and Porras 2002). As a complementary effort, this paper digs deeper into the literature regarding the Costa Rica experience in an effort to see what we are learning from the experience: how has technical, scientific and economic information on environmental services fed into these initiatives? To what extent are these initial experiences being monitored and evaluated? Is there a feedback loop that connects these experiences with learning about environment and development issues, particularly in the local context of policy-making within the country? The principal objective of the literature review is to identify and review documents and other material that address the following: 1. the local origins of the concept of payments and markets for environmental services and how they have developed over time, particularly in relation to the broader international development of the concept and local necessities/realities (historical and trend analysis); 2. the types of existing initiatives related to markets for environmental services, and who is participating in such initiatives (descriptive work); 3. the knowledge base that underpins market development, i.e. the extent to which markets are based on specific scientific and technical knowledge regarding the biophysical, economic and social relationships involved as opposed to general views on the subject (critical assessment); 4. the initiatives undertaken and underway to date with respect to the monitoring and evaluation of the experience with payments and markets for environmental services and to what extent (and with what results) the literature assesses these initiatives in terms of economic efficiency, environmental effectiveness, and social equity and/or poverty reduction. Where written material is not available or does not provide comprehensive coverage, interviews with those involved in these initiatives were used to supplement the documentary evidence. Given that IIED has undertaken a thorough review of the global literature on this topic and identified the examples emerging from Costa Rica, objectives 1 and 2 draw heavily on the existing IIED work by attempting to cross-check, confirm and, where possible, expand the coverage (in number and depth) of existing cases of markets and payments. The added value of the literature review will be in the deepening of the knowledge base and analysis of its content with respect to objectives 3 and 4. This in turn provides a basis for charting a way forward. The paper is organized to cover the objectives one by one. In the first chapter the local origins of the concept of markets and payments for environmental services in Costa Rica is explored. The paper then turns to the experiences (or market cases) gained so far in the country, providing in each of the succeeding chapters a description and review of each of the cases, an assessment of the role of knowledge in the development and formulation of the initiatives and a report on monitoring and evaluation underway to date. The paper concludes by drawing out some of the lessons learned and making recommendations regarding practical steps that other countries, researchers and financing organizations might take to improve the process of launching such initiatives in the future.

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  Monteverde, Costa Rica: Balancing environment and development

  Erin Cavanagh

  Two years ago I would have never imagined that I would see the glow of molten lava contrasting against the night sky, stand on the top of a mountain looking at the Pacific Ocean hundreds of miles away, or become the daughter of a family other than my own. I began my journey through the World Food Prize program in February 2004 when my friend Lindsey Negaard told me that she would be interning in Mexico for the World Food Prize. After explaining to me all the different steps necessary to compete for an internship, she asked me if I was interested in continuing the program for Bettendorf High School. Before writing my paper on water efficiency in rice production and obtaining background information on starvation, I was ignorant of the number of hungry people worldwide that can be saved through science. The presenters at the World Food Prize Symposium in October 2004 impacted me to desire to see these parts of the world myself. When I was selected to intern at the Monteverde Institute in Monteverde, Costa Rica, I realized that I had a great deal to learn about Costa Rica and its culture before I even left the country. The next two months taught me lessons that I will never forget and introduced me to a people and a culture that I will treasure for the rest of my life. Costa Rica, meaning rich coast in Spanish, is a beautiful country sandwiched between Nicaragua to the north and Panama to the south. Although Costa Rica is a very small country, encompassing only 51,100 sq km, it is one of the most well-educated countries in Central America with 96% of its approximately 4 million people being able to read and write over age 15. (CIA World Fact Book) Because of abolishing its military in 1948, Costa Rica has gained a reputation of a safe, peaceful country with strong democratic roots. (“Our Democracy: An Overview”) Although Costa Rica’s economy has been booming recently because of ecotourism, traditionally Costa Ricans worked in the agricultural sector. Even today, twenty percent of its population is employed in agriculture. (CIA World Fact Book) The Costa Rican people, or “ticos” as they are referred to commonly, are an extremely friendly and caring population that emphasizes retaining traditions such as the Catholic religion. (“Our Democracy: An Overview”)

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  Monteverde, Costa Rica: Balancing environment and development

  Erin Cavanagh

  Two years ago I would have never imagined that I would see the glow of molten lava contrasting against the night sky, stand on the top of a mountain looking at the Pacific Ocean hundreds of miles away, or become the daughter of a family other than my own. I began my journey through the World Food Prize program in February 2004 when my friend Lindsey Negaard told me that she would be interning in Mexico for the World Food Prize. After explaining to me all the different steps necessary to compete for an internship, she asked me if I was interested in continuing the program for Bettendorf High School. Before writing my paper on water efficiency in rice production and obtaining background information on starvation, I was ignorant of the number of hungry people worldwide that can be saved through science. The presenters at the World Food Prize Symposium in October 2004 impacted me to desire to see these parts of the world myself. When I was selected to intern at the Monteverde Institute in Monteverde, Costa Rica, I realized that I had a great deal to learn about Costa Rica and its culture before I even left the country. The next two months taught me lessons that I will never forget and introduced me to a people and a culture that I will treasure for the rest of my life. Costa Rica, meaning rich coast in Spanish, is a beautiful country sandwiched between Nicaragua to the north and Panama to the south. Although Costa Rica is a very small country, encompassing only 51,100 sq km, it is one of the most well-educated countries in Central America with 96% of its approximately 4 million people being able to read and write over age 15. (CIA World Fact Book) Because of abolishing its military in 1948, Costa Rica has gained a reputation of a safe, peaceful country with strong democratic roots. (“Our Democracy: An Overview”) Although Costa Rica’s economy has been booming recently because of ecotourism, traditionally Costa Ricans worked in the agricultural sector. Even today, twenty percent of its population is employed in agriculture. (CIA World Fact Book) The Costa Rican people, or “ticos” as they are referred to commonly, are an extremely friendly and caring population that emphasizes retaining traditions such as the Catholic religion. (“Our Democracy: An Overview”)

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  Que estamos aprendiendo de la experiencia con los mercados de servicios ambientales en Costa Rica? Revisión y crítica de la literatura

  Manrique Rojas and Bruce Aylward

  El uso de mercados y el pago de servicios ambientales es un tema que ha venido ganando terreno entre los hacedores de políticas, ambientalistas y desarrolladores alrededor del mundo. Visto desde una perspectiva simple el termino “servicios ambientales”, se refiere al concepto de sistemas naturales que proveen un flujo continuo de bienes y servicios a la sociedad. Lo anterior contrasta con servicios similares brindados por infraestructura física hecha por el hombre y capital tecnológico (tratamiento de agua, fertilización artificial, ingeniería genética) para los que los servicios ambientales son un substituto. El uso de mecanismos de mercado como herramienta para incorporar el valor económico de los servicios ambientales a la toma de decisiones financieras de productores y consumidores es una herramienta adicional que podría ser utilizada para resolver las eternas fallas de mercado que conllevan a un bajo rendimiento económico- tener menos servicios ambientales y pagar más por sus sustitutos hechos por el hombre. En el mundo en vías de desarrollo, Costa Rica ha liderado esfuerzos para experimentar con la aplicación de esos mecanismos, muchos de los cuales eran simplemente ideas sobre papel años atrás. Una encuesta sobre mercados de servicios ambientales realizada por IIED evidencia el rol formativo que ha tenido Costa Rica y provee una rica caracterización de la economía de estas iniciativas en un contexto global (Landell-Mills and Porras 2002). Como una inciativa complementaria este documento profundiza en la literatura sobre la experiencia costarricense con el fin de visualizar lo que estamos aprendiendo de esa experiencia: ¿cómo ha calzado dentro de estas iniciativas la información técnica, científica y económica sobre servicios ambientales? ¿Qué alcance tienen el monitoreo y la evaluación de estas experiencias iniciales? Existe un retrocontrol que conecte estas experiencias con el aprendizaje ambiental y temas de desarrollo, particularmente en el contexto local de elaboración de políticas dentro del país. El principal objetivo de esta revisión bibliográfica es identificar y analizar documentos y otros materiales que estén dentro de la siguiente temática: 1. los orígenes locales del concepto de pago y mercado de servicios ambientales y como estos han evolucionado a través del tiempo, particularmente en relación con el amplio desarrollo internacional del concepto y con las necesidades / realidades locales; 2. el tipo de iniciativas existentes relacionadas con los mercados de servicios ambientales, y quien esta participando en estas actividades (trabajo descriptivo); 3. el conocimiento base que soporta el desarrollo de mercados, ej. el punto en el que se basan los mercados, un conocimiento técnico y científico que toma en cuenta la relación biofísica, económica y social que surge de los diferentes puntos de vista sobre el tema; 4. las iniciativas tomadas con respecto al monitoreo y evaluación de la experiencia con pagos y mercados de servicios ambientales y hasta donde y con que resultados la literatura toma estas iniciativas en términos de eficiencia económica, eficiencia ambiental, equidad social y/o reducción de la pobreza. En los casos en los que el material escrito no esta disponible o no brindaba una buena cobertura se realizaron entrevistas con las personas involucradas en estas iniciativas con el fin de completar la información requerida. 2 Dado que el IIED ha realizado una revisión de la literatura global en este tema y que ha identificado ejemplos en Costa Rica, los objetivos uno y dos se cumplen con información existente del IIED. Además, se realiza un control cruzado confirmatorio y una expansión de la cobertura de los casos existentes de pago de servicios ambientales. El valor agregado de la revisión bibliografía esta en la profundización del conocimiento base y análisis de sus contenidos con respecto a los objetivos tres y cuatro. El documento esta organizado con el fin de cumplir con los objetivos uno a uno. En el primer capítulo se explora el concepto de mercado y pago de servicios ambientales en Costa Rica. Posteriormente, este escrito evalúa la experiencia ganada hasta el momento por el país, y brinda en los subsiguientes capítulos una descripción y un análisis de los casos, además de evidenciar el papel que tiene el conocimiento dentro del desarrollo y formulación de cada una de las iniciativas hasta la fecha. Finalmente se concluye con la presentación de las lecciones aprendidas y las recomendaciones prácticas sobre los pasos que otros países, investigadores y organizaciones financieras deberían tomar para mejorar el proceso de implementación de este tipo de actividades en el futuro.

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  Que estamos aprendiendo de la experiencia con los mercados de servicios ambientales en Costa Rica? Revisión y crítica de la literatura

  Manrique Rojas and Bruce Aylward

  El uso de mercados y el pago de servicios ambientales es un tema que ha venido ganando terreno entre los hacedores de políticas, ambientalistas y desarrolladores alrededor del mundo. Visto desde una perspectiva simple el termino “servicios ambientales”, se refiere al concepto de sistemas naturales que proveen un flujo continuo de bienes y servicios a la sociedad. Lo anterior contrasta con servicios similares brindados por infraestructura física hecha por el hombre y capital tecnológico (tratamiento de agua, fertilización artificial, ingeniería genética) para los que los servicios ambientales son un substituto. El uso de mecanismos de mercado como herramienta para incorporar el valor económico de los servicios ambientales a la toma de decisiones financieras de productores y consumidores es una herramienta adicional que podría ser utilizada para resolver las eternas fallas de mercado que conllevan a un bajo rendimiento económico- tener menos servicios ambientales y pagar más por sus sustitutos hechos por el hombre. En el mundo en vías de desarrollo, Costa Rica ha liderado esfuerzos para experimentar con la aplicación de esos mecanismos, muchos de los cuales eran simplemente ideas sobre papel años atrás. Una encuesta sobre mercados de servicios ambientales realizada por IIED evidencia el rol formativo que ha tenido Costa Rica y provee una rica caracterización de la economía de estas iniciativas en un contexto global (Landell-Mills and Porras 2002). Como una inciativa complementaria este documento profundiza en la literatura sobre la experiencia costarricense con el fin de visualizar lo que estamos aprendiendo de esa experiencia: ¿cómo ha calzado dentro de estas iniciativas la información técnica, científica y económica sobre servicios ambientales? ¿Qué alcance tienen el monitoreo y la evaluación de estas experiencias iniciales? Existe un retrocontrol que conecte estas experiencias con el aprendizaje ambiental y temas de desarrollo, particularmente en el contexto local de elaboración de políticas dentro del país. El principal objetivo de esta revisión bibliográfica es identificar y analizar documentos y otros materiales que estén dentro de la siguiente temática: 1. los orígenes locales del concepto de pago y mercado de servicios ambientales y como estos han evolucionado a través del tiempo, particularmente en relación con el amplio desarrollo internacional del concepto y con las necesidades / realidades locales; 2. el tipo de iniciativas existentes relacionadas con los mercados de servicios ambientales, y quien esta participando en estas actividades (trabajo descriptivo); 3. el conocimiento base que soporta el desarrollo de mercados, ej. el punto en el que se basan los mercados, un conocimiento técnico y científico que toma en cuenta la relación biofísica, económica y social que surge de los diferentes puntos de vista sobre el tema; 4. las iniciativas tomadas con respecto al monitoreo y evaluación de la experiencia con pagos y mercados de servicios ambientales y hasta donde y con que resultados la literatura toma estas iniciativas en términos de eficiencia económica, eficiencia ambiental, equidad social y/o reducción de la pobreza. En los casos en los que el material escrito no esta disponible o no brindaba una buena cobertura se realizaron entrevistas con las personas involucradas en estas iniciativas con el fin de completar la información requerida. 2 Dado que el IIED ha realizado una revisión de la literatura global en este tema y que ha identificado ejemplos en Costa Rica, los objetivos uno y dos se cumplen con información existente del IIED. Además, se realiza un control cruzado confirmatorio y una expansión de la cobertura de los casos existentes de pago de servicios ambientales. El valor agregado de la revisión bibliografía esta en la profundización del conocimiento base y análisis de sus contenidos con respecto a los objetivos tres y cuatro. El documento esta organizado con el fin de cumplir con los objetivos uno a uno. En el primer capítulo se explora el concepto de mercado y pago de servicios ambientales en Costa Rica. Posteriormente, este escrito evalúa la experiencia ganada hasta el momento por el país, y brinda en los subsiguientes capítulos una descripción y un análisis de los casos, además de evidenciar el papel que tiene el conocimiento dentro del desarrollo y formulación de cada una de las iniciativas hasta la fecha. Finalmente se concluye con la presentación de las lecciones aprendidas y las recomendaciones prácticas sobre los pasos que otros países, investigadores y organizaciones financieras deberían tomar para mejorar el proceso de implementación de este tipo de actividades en el futuro.

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  Market and policy incentives for livestock production and watershed protection in Arenal, Costa Rica

  Aylward, Bruce; Echeverría, Jaime; and Allen, Katherine

  Conventional wisdom amongst environmentalists holds that the cutting of tropical forest for livestock production is not only bad business but also bad for the environment. In particular, it is thought that conversion to pasture leads to rising sedimentation of waterways and reservoirs, an increase in flooding and loss of dry season water supply. In the case of Lake Arenal, Costa Rica this conventional wisdom is stood on its head in an evaluation of the market and policy incentives guiding land use in the Río Chiquito watershed of the Arenal region of Costa Rica. The study suggests that ranching, dairy and associated downstream hydrological effects represent important values to the Costa Rican economy, values that significantly outweigh expected returns from options for reforestation or forest regeneration. Further, there appear to be no large market or policy incentives subsidizing livestock production or providing incentives for rapid deterioration of soil productivity. Thus non-hydrological externalities associated with changing land use from forests to livestock production, such as carbon fixation, biodiversity, ecotourism and existence values, are likely to be of minimal importance in Río Chiquito. Therefore the analysis suggests that there is little reason to encourage large-scale reforestation of the watershed or to purchase land for protection. Instead efforts should focus on how to maximize the complementary returns from livestock and water production. Los ambientalistas comúnmente sostienen que la tala de bosques tropicales para la ganadería no sólo es mal negocio sino que también es nociva para el medio ambiente. En particular, se piensa que la conversión a terrenos de pastoreo conduce a un aumento en la sedimentación de las vías fluviales y represas y conlleva a un incremento de las inundaciones y bajas en las reservas de agua en épocas de sequía. En el caso del lago Arenal en Costa Rica, esta percepción convencional se ve cuestionada mediante una evaluación de incentivos de mercado y de política que guían el uso de la tierra en la cuenca del Río Chiquito en la región de Arenal. El estudio demuestra que la ganadería, la lechería y los efectos hidrológicos asociados a éstas representan valores importantes para la economía costarricence. Estos son valores que sobrepasan los ingresos esperados de opciones como la reforestación y de la regeneración forestal. Además, no parece haber incentivos de mercado o de política que subsidien la ganadería, ni incentivos para un deterioro acelerado en la productividad del suelo. Dado que las externalidades no hidrológicas asociadas con la ganadería, tales como la fijación de carbono, biodiversidad, bioturismo y valores de existencia son tan poco importantes en Río Chiquito, el análisis sugiere que no hay razón para fomentar la reforestación de las cuencas a gran escala o adquirir tierra para protegerla. Los esfuerzos deben dirigirse, en cambio, a maximizar los ingresos complementarios provenientes de la ganadería y de las vías fluviales.

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  Institutional arrangements for watershed management: A case study of Arenal, Costa Rica

  Aylward, Bruce and Fernández-González, Alvaro

  The CREED Costa Rica project conducted an exhaustive quantitative inquiry into the economic factors that determine land use in the Río Chiquito watershed of Lake Arenal, Costa Rica, and found that livestock production is likely to produce positive hydrological externalities. This paper integrates these results into an application of the Institutional Analysis and Development Framework that is informed by a participatory process conducted with watershed stakeholders. The paper identifies physical measures, institutional arrangements and incentive mechanisms to stimulate improved watershed management in Río Chiquito by expanding the analysis beyond just the internalisation of hydrological externalities, to consideration of the larger “bundle” of goods and services provided by the watershed. In so doing it provides a refined vision for the Action Programme drafted by stakeholders. The latter is evaluated using IAD criteria and appears to be a promising improvement on current arrangements. Not surprisingly, the findings suggest that the public good characteristics of a number of the watershed goods and services produced in Río Chiquito imply the need for institutional arrangements beyond that represented by markets. However, the results suggest that simply labelling such goods and services as public goods is too simplistic an approach. In the Arenal case, although upstream landholders may find it difficult to exclude others from consuming the downstream benefits of land use decisions already made, the possibility remains that they may retain rights of exclusion over future land use decisions. Given the private good characteristics of downstream hydrological products this suggests that there does exist a basis for a market-driven, polycentric arrangement between upstream producers and downstream consumers. Thus, the advantage of investigating the public good natures of the myriad of goods and services produced by watersheds is that it provides an analytical basis for the suggestions of the types of institutional arrangements that might be most appropriate for the management of these goods and services. As an incentive mechanism for implementing a polycentric scheme to improve watershed management, it is recommended that the inter-institutional commission, called for under the Action Programme, develop a two-way sealed bid auction system of allocating contractual arrangements. Producers would agree to undertake management improvements in return for compensatory resource transfers (or projects). External stakeholders wishing to obtain off-site services would not only contribute funds but also assist in establishing priorities for the awarding of contracts, up to and including establishing their willingness to pay for specific measures in specific geographic areas. Ideally, producers would likewise set their offer price for specific measures in specific geographic areas. The respective sealed bids would be sorted and matched in a cost-effective, optimising manner by an independent committee organised under the commission. The hydrological and economic information developed in the CREED project could be used to establish both hydrological and carbon storage priorities, while the offer price for the measures would be best left to the individual producers to decide El proyecto CREED Costa Rica realizó un estudio cuantitativo exhaustivo sobre los factores económicos que determinan el uso de la tierra en la subcuenca hidrológica Río Chiquito del Lago Arenal, Costa Rica y encontró que la producción ganadera parece generar externalidades hidrológicas positivas. Este documento integra estos resultados en una aplicación del Marco de Análisis Institucional y de Desarrollo realizada por medio de un proceso participativo conducido por varios grupos de actores interesados en la cuenca. El documento identifica medidas físicas, arreglos institucionales y mecanismos de incentivos que estimulen mejoramientos en el manejo de la cuenca hidrográfica de Río Chiquito, por medio de la expansión del análisis más allá de la internalización de las externalidades hidrológicas hasta a la consideración de un amplio rango de bienes y servicios provistos por la cuenca. Este proceso provee una visión redefinida para el Programmea de Acción esbozado por los grupos de interesados. Este último fue evaluado utilizando el criterio IAD y se encontró que constituye un mejoramiento promisorio sobre los arreglos actuales. No es sorprendente que los resultados sugieran que las características de bien público de un número de los bienes y servicios producidos por la cuenca Río Chiquito implican la necesidad de arreglos institucionales más allá de aquellos representados por los mercados. Aun así, los resultados sugieren que simplemente designar dichos bienes y servicios como públicos es un procedimiento muy simplista. En el caso de Arenal, aunque para los propietarios río arriba sea dificil excluir a otros de consumir los beneficios río abajo generados por previas decisiones de uso de la tierra, existe la posibilidad de que ellos mantengan derechos de exclusión de futuras decisiones de uso de la tierra. Dadas las características de de bien privado de los productos hidrológicos río abajo, ésto sugiere que debe existir una base para un arreglo de mercado, policéntrico , entre productores río arriba y consumidores río abajo. De esta manera, la ventaja de investigar la naturaleza de bien público de los innumerables bienes y servicios generados por las cuencas hidrográficas es que provee una base analítica para las sugerencias sobre los tipos de arreglos institucionales que podrían ser más apropiados para el manejo de estos bienes y servicios. Como un mecanismo de incentivos para la implementación de un esquema policéntrico que mejore el manejo de las cuencas hidrográficas, se recomienda que una comisión interinstitucional, designada bajo el Programmea de Acción, desarrolle un sistema de subasta sellada de dos sentidos para colocar arreglos contractuales. Los productores acordarían llevar a cabo mejoramientos en el manejo a cambio de transferencias de recursos (o proyectos) compensatorios. Actores externos interesados en obtener servicios fuera de sitio no solamente contribuirían con fondos sino que asistirían en el establecimiento de prioridades para la entrega de contratos, incluyendo además el establecimiento de su disponibilidad a pagar por medidas específicas en áreas geográficas específicas. Los montos sellados respectivos serían mezclados y comparados siguiendo un proceso de optimización costo-eficacia, por un comité independiente organizado bajo la comisión. La información hidrológica y económica desarrollada en el proyecto CREED podría ser utilizada para establecer prioridades tanto hidrológicos como de secuestro de carbono, mientras que el precio ofrecido por las medidas sería dejado a consideración de los productores individuales

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  An analysis of private and social discount rates in Costa Rica

  Aylward, Bruce and Porras, Ina

  In the economic analysis of long-term projects or changes in policy and land use with long term impacts, the cost and benefit flows typically occur in different periods. The process of discounting these flows enables them to be added together and compared with the net present value of alternative courses of action. Discounting is therefore central to intertemporal economic analysis. In the case of the analysis of environmental issues, discounting assumes particular importance, given that economic benefits produced by ecosystems (or damages incurred by their degradation) either (1) occur only in the future (2) increase into the future or (3) subsist at a low level indefinitely. In such cases the difference between a 5 and a 15% discount rate can easily outweigh other considerations in the decision-making process. In a recent analysis of economic incentives for watershed protection in Costa Rica, efforts to value forest productivity and long-term hydrological externalities confronted similar problems. Consultation with local financing agencies, researchers and the literature to determine the source of the discount rate methods and figures employed in practice yielded no satisfactory indication of how rates were developed. Given the paucity of informed expectation regarding such a key variable this paper presents the results of the subsequent effort to develop an informed and defensible position regarding discount rate issues in Costa Rica. The general objectives of the paper are to develop discount rates that can be used in financial and economic analysis within the Costa Rican context. Specifically, the following discount measures were identified (expected use is indicated in parenthesis): • real after-tax private opportunity cost of capital (for discounting all flows in financial analysis) • a consumption rate of interest (CRI), or social rate of time preference (for discounting consumption flows in economic analysis) • development of a shadow cost of capital (for use with the CRI in discounting investment flows in economic analysis) In the process of meeting these objectives, information is also required on imperfections and applicable policy distortions in Costa Rican capital markets and local real riskless interest rates. The final product of the analysis is the calculation of a social discount rate for Costa Rica. Following a presentation of the theory and methods employed, the data and results for Costa Rica are presented.

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  Economic incentives for watershed protection: A report on ongoing study of Arenal, Costa Rica

  Aylward, Bruce; Echeverría, Jaime; and Barbier, Edward B.

  Tropical moist forests provide a range of goods and services to society. Traditionally, decisions regarding tropical forest land use have been made on the basis of major direct uses of forest land that generate local and national benefits. Typically, this has meant timber extraction and the conversion of forest to agricultural or livestock uses. In recent years increasing attention has been given to the important economic role non-market benefits may play in providing incentives for the conservation of tropical forests. A number of studies have explored the local, national and global benefits generated by non-timber forest products, ecotourism, pharmaceutical prospecting and carbon storage. Another important ecological service that is often cited as an economic justification of conservation activities is the watershed protection function provided by tropical forests. Soil and water conservation may yield benefits to land-owners and alleviate damage to downstream economic activities. Nevertheless efforts to conserve watersheds are plagued by the difficult nature of the externalities involved. The off-site nature of many of the benefits of conservation activities makes both valuation and internalization of these externalities difficult, thereby preventing the development of 'sustainable' watershed protection programs. This is even the case in areas where pristine, mountainous forests provide downstream national benefits to hydroelectricity and irrigation schemes. The establishment of incentive systems that solve market, policy and institutional failures impeding watershed protection in such areas remains a vexing problem for policy-makers, scientists and communities in developing countries. Drawing on the literature and on-going research in Costa Rica, the paper outlines a collaborative research project investigating the potential for economic incentives for watershed protection in the Arenal region of Costa Rica. Los bosques tropicales húmedos ofrecen a la sociedad una gran variedad de bienes y servicios. Tradicionalmente, las decisiones tomadas con respecto al uso de la tierra de los bosques tropicales tienen como base el uso directo de las tierras forestales que generan beneficios locales y nacionales. Típicamente, esto es la extracción de madera y la conversión del bosque hacia usos agrícolas o ganaderos. En años recientes, se ha prestado una mayor atención al importante papel que pueden desempeñar los beneficios fuera del mercado para dar incentivos para la conservación del bosque tropical. Un número de estudios ha explorado los beneficios locales, nacionales y globales que generan los productos no-madereros de la selva, el ecóturismo, las prospecciones farmacéuticas y el almacenamiento de carbón. Otro importante servicio ecológico citado a menudo como justificación económica de las actividades de conservación, es la función protectora de las cuencas que presta el bosque tropical. La conservación de la tierra y el agua puede ofrecer beneficios para los propietarios de la tierra y aliviar el daño a actividades económicas río abajo. Sin embargo, los esfuerzos por conservar las cuencas están acosados por el difícil carácter de las externalidades envueltas. El carácter no-local de muchos de los beneficios de las actividades de conservación hace que la valuación e internalización de estas externalidades sea difícil, de ese modo impidiendo el desarrollo de programas "sostenibles" para protejer las cuencas. Este también es el caso en áreas donde bosques prístinos y montañosos ofrecen beneficios nacionales río abajo para planes de hidroelectricidad e irrigación. Un punto de discordia para los tomadores de decisiones, científicos y comunidades de países en vía de desarrollo, es el establecimiento de sistemas de incentivos que resuelvan las fallas políticas, institucionales y del mercado que impiden la protección de las cuencas en estas áreas. Con base a información obtenida en la literatura y a la investigación que continua en Costa Rica, este ensayo diseña un proyecto de investigación colaborativa sobre el potencial de los incentivos económicos para la protección de las cuencas en la región de Arenal en Costa Rica.