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Kemkes, Robin

Community Development and Applied Economics

2008

MS

Ecosystems provide services essential to human wellbeing and livelihood. Because the ecosystem structure that provides these services may be privately owned, ecosystem service provision is often compromised by the sale of ecosystem structure as raw materials in the marketplace. In addition, conservation objectives such as preserving forests for carbon sequestration, water filtration and aesthetic and recreational use are unmet by direct public provision. Therefore, it is essential that programs be developed to pay private landowners to supply ecosystem services. Many studies attempt to determine the willingness to pay of consumers of these services. However, valuation methods are flawed because they are weighted by ability to pay, provide only marginal values for services that require the existence of entire ecosystems and are particularly inappropriate where ecological thresholds are present. The estimation of a supply curve for ecosystem services provides a more accurate representation of where to begin conservation and restoration of ecosystems. One of the studies presented in this thesis analyzes survey results of 376 Vermont woodland owners. Relationships between income, education and willingness to provide ecosystem services will be determined. Respondents also report payment levels at which they would be willing to provide ecosystems services on their land. Based on these reports, supply curves for ecosystem services will be calculated for the state of Vermont. Regression analysis will reveal which variables influence willingness to provide ecosystem services with little or no payment. Preliminary results suggest that over half of the respondents are willing to provide ecosystem services without payment which indicates that influences beyond monetary incentives exist in supplier decision-making. Behavioral economics literature reports social motivations such as altruism and intergenerational equity play a large role in willingness to provide public goods. This study provides a baseline for comparative studies of other states with varying demographics. It will also inform Vermont policies aimed at expanding conservation programs. In addition, there has been little discussion, about how to design a payment program based on the characteristics of an ecosystem service. The benefits of a payment program are maximized and the costs minimized through varying levels of public, private and civil sector participation dependent on the characteristics of the service provided. Cross-sector network creation and effective policy tool choice are important to the viability of a payments for ecosystem services program. Another section of this thesis offers a framework for identifying the appropriate level of participation for institutions across sectors and policy tool choice dependent on the characteristics of an ecosystem.