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Central America


Distributional equity of fuel tax in Costa Rica

Perhaps current prices of fossil fuels are the reflection of the hurricane's eye passing through the global markets. Before exorbitant oil prices again steal all the attention, it is important to analyze our policies on public and private transport management in general. And in particular fuel tax policies, which is here discussed by Francisco Alpizar, Rebecca Osakwe and Allen Blackman.


The Effect of Risk, Ambiguity, and Coordination on Farmers´Adaptation to Climate Change: A Framed Field Experiment

The authors used a framed field experiment with coffee farmers in Costa Rica after tropical storm Alma to explore how farmers react to different levels of risk to income and productive means from extreme weather under measurable and unmeasurable uncertainty. They also examined whether investment costs to reduce vulnerability exhibit economies of scope.


Conditional Cooperation and Social Group: Experimental Results from Colombia

There is growing interest in understanding whether behavior is the same across locations. By holding cross- and within-country dimensions constant (in contrast to previous studies on cross-group comparisons of conditional cooperation), the authors investigated cooperative behavior between social groups in the same location. Their results reveal significantly different cooperation behavior, suggesting that different social groups exhibit differences both in terms of composition of types and extent of conditional cooperation.


Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary

In developing countries, weak environmental regulatory institutions often undermine conventional command-and-control policies. As a result, these countries are increasingly experimenting with alternative approaches that aim to leverage nonregulatory “green” pressures applied by local communities, capital markets, and consumers. This article reviews three strands of the empirical literature on this trend.


User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower

National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems could be mitigated by replacing at least some government funding with direct contributions from individual environmental service users who have incentives to underwrite payments and who can ensure that they are targeted appropriately.


Strategies for adapting to climate change in Costa Rica

Read María A. Naranjo' opinion article (Estrategias de adaptación al cambio climático en Costa Rica) in "La Nación" (January 28th), related to the EfD Central America Project "Small Farmers' Determinants of Private Adaptation to Climate Change Strategies" (Spanish only).


Something more than building rural aqueducts

Read Francisco Alpizar’and Róger Madrigal’ opinion article (Algo más que construir acueductos rurales) in “La Nacion” (January 18th) associated with the EfD Central America Project: Decentralization in water resource management: exploring the determinants of success (Spanish only).


Don’t Tell Me What to Do, Tell Me Who to Follow!

Results indicate that visitors look at the behavior of others in deciding if and how much to donate, but partially reject being told what to do. Also, as the social reference moves farther away from average behavior, its effect on the typical visitor is diminished, leading to lower and less frequent donations.


Agroforestry Price Supports as a Conservation Tool: Mexican Shade Coffee

Economic policies that boost profits from agroforesty, thereby creating financial incentives for land managers to favor these systems over less environmentally friendly land uses, could, in theory, have ancillary environmental benefits. This paper analyzes primary and secondary data to determine whether a voluntary price support program for Mexican coffee-mostly grown in shaded systems that supply important ecosystem services- has had such "win-win" benefits by stemming land-use change in the coffee sector.


Tradable Permits in Developing Countries: Evidence from Air Pollution in Santiago, Chile

Santiago was one of the first cities outside the OECD to implement a tradable permit program to control air pollution. This paper looks closely at the program’s performance over the past 10 years, stressing its similarities and discrepancies with trading programs in developed countries, and analyzing how it has reacted to regulatory adjustments and market shocks. Studying Santiago’s experience allows us to discuss the drawbacks and advantages of applying tradable permits in less developed countries.


Environmental Policy, Fuel Prices, and the Switch to Natural Gas in Santiago, Chile

The author analyzes the role of environmental policies and energy cost savings in the switch to natural gas by stationary sources in Chile. There is skepticism about using market-based policies (economic instruments) in the developing world—permit trading programs versus emissions fees. This paper produces new evidence of the role of environmental regulations and market forces in a successful air-quality improvement program in Chile, a less-developed country.


Taxes, Permits, and the Diffusions of a New Technology

The author looks at the effects of the choice between taxes and permits on the pattern of adoption of a new emissions abatement technology. The regulator determines the optimal ex-post amount of emissions before firms start to adopt the technology. Each firm decides when to adopt, considering benefits, costs, and advantage gained over their rivals, producing a sequence of adoption that is “diffused” into the industry over time.


Deforestation Impacts of Environmental Services Payments – Costa Rica’s PSA Program 2000–2005

The authors estimated the deforestation impact of Costa Rica’s pioneering environmental services payments program (Pagos por Servicios Ambientales, or PSA) between 2000 and 2005. Despite finding that less than 1 in 100 of enrolled land parcels would have been deforested annually without payments, the program’s potential for impact was increased by explicitly targeting areas with deforestation pressure and increasing some payments to enroll land that would have been cleared.


Anonymity, Reciprocity and Conformity: Evidence from Voluntary Contributions to a Natural Park in Costa Rica

In a natural field experiment, the authors quantified the importance of anonymity, reciprocity, and conformity through the provision of social reference levels in order to explain voluntary contributions. In the study setting, the effects of the various treatments were small, suggesting that the self-image as an honorable person, irrespective of other people’s opinions, could be an important explanation of contribution behavior. The experiment overall showed no clear evidence that current practice by charitable organizations is inefficient.


Estimating Spatial Interactions in Deforestation Decisions

As part of the book Frontiers of Biodiversity Economics, Cambridge University Press, this chapter describes a model of interactions in the context of deforestation, based on an equilibrium in beliefs about the neighbours’ actions, and applies the model to data of two regions within Costa Rica.


Land Conservation Policies and Income Distribution: Who Bears the Burden of our Environmental Efforts?

We analyze how land conservation policies affect income distribution looking at changes in wages and rents. Land conservation policies restrict the land for agricultural use. We study how these restrictions affect workers and landowners incomes. Aggregate rents rise when protected areas increase despite the reduction of land availability. Real wages decrease as a consequence of higher prices.


Markets for the Environment

This paper, examine why markets are being widely proposed to address environmental problems and manage natural resources, give some background on their history, and speculate on their future.


Assessing linkages between agriculture and biodiversity in Central America: Historical overview and future perspectives

The objective of this report is to explore the impact of agriculture on biodiversity conservation in Central America, identify the factors which perpetuate or exacerbate agricultural systems or management practices that adversely impact biodiversity conservation, and examine different strategies and approaches that could be used to potentially mitigate some of the negative impacts of agriculture on biodiversity conservation, either by making the agricultural systems more compatible with biodiversity conservation, or by removing the stimuli for agricultural expansion into remaining natural areas or unsustainable agricultural practices.


Collective versus Random Fining: An Experimental Study on Controlling Ambient Pollution

This paper presents an experimental study of two different pollution compliance games: collective vis-à-vis random fining as a means to regulate non-point pollution. Result suggests the importance of considering subject pool differences in the evaluation of environmental policies by means of experiments, particularly if those policies involve certain forms of management decisions.