Browsing by Author "Vincent, Jeffrey"

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Open Access
A Cost Benefit Analysis of Forest Certification at The Forestland Group
(2012-12-06) Schreiber, Jenna
This project evaluates the costs and benefits of the Forest Stewardship Council’s (FSC) forest certification for a large timber management organization (TIMO). FSC certification is a voluntary, market-based program that promotes sustainable forest management through third-party certification. The TIMO in this case study manages 3.3 million acres of land certified under FSC, and this project evaluated both the direct and indirect costs and benefits of certification. This project was able to quantify the direct and indirect costs and benefits of forest certification through surveys, financial analyses and regression analyses. On average, forest certification is a net-positive program for the client, earning an estimated $771,000 of additional annual revenue. Certification premiums paid for finished wood products are significantly higher than certification premiums for certified stumpage. Certified wood products receive an overall price premium of 10.5% while the premium for certified stumpage ranges from 1.6-4.3%. Price premiums for finished wood products are considerably higher for domestic sales than for export sales. The domestic sale of finished wood products generates a statistically significant price premium of 30.0% as compared to the statistically significant but much lower premium for exported wood products of 3.4%. This project provides evidence that there are financial incentives for forestland owners to maintain forest certification. FSC has marketed both the ecological and financial benefits of maintaining forest certification. Previous studies of forest certification have generally concluded that the ecological benefits of forest certification are clear but that the desired financial benefits have not yet materialized. This project demonstrates that a large timberland owner can receive meaningful financial benefits from its forest certification program.
Open Access
A Financial and Economic Assessment of the Conservation of Northwestern Madagascar Mangroves
(2016-04-29) Witt, Emily
Programs such as REDD (reducing emissions from deforestation and forest degradation) that provide financial incentives to maintain natural carbon stocks are being implemented worldwide to address climate change and the conservation of threatened ecosystems. In developing countries, where the relative cost of conservation is high, these programs are especially attractive to promote sustainable resource use and prevent conversion of valuable ecosystems to other land uses. To incorporate REDD effectively in these areas, the financial costs and benefits resulting from the project implementation needs to be accessed. Quantification of income received from ecosystem services under baseline and project scenarios needs to be estimated, along with other costs of conservation management in order for a comprehensive comparison to be done. Ensuring that the project not only generates additional value, but also promotes the livelihoods of communities that rely on these ecosystems is key to the long-term sustainability of conservation efforts. This report serves as a cost-benefit analysis case study in Ambro-Ambanja Bay, Madagascar. This financial analysis looks at Blue Ventures’ proposed conservation of mangrove forests in Northwestern Madagascar using a REDD project. Project cash flows center around net income derived from certain ecosystem services, carbon income generated from REDD and project implementation and transaction costs. One limitation of this analysis is the exclusion of several partial, indirect and non-use ecosystem services provided by the Ambro-Ambanja Bay mangrove forest. To address this, a total economic valuation framework of all ecosystem services provided by Ambro-Ambanja Bay mangroves was created to provide additional insight into the entire estimated value of healthy mangrove forests. The first chapter of this report provides a background on mangrove ecosystems, the state of Ambaro-Ambanja Bay mangroves, and the general objectives of the proposed project. The second chapter provides an overview of methods used to estimate deforestation, methods used to derive the net income generated from various ecosystem services, and estimates of the costs associated with the project. The chapter details how these costs and benefits were derived under the baseline and project scenarios to provide insight on the impacts the two scenarios have on the estimated financial cash flows. The third chapter consists of a financial analysis of the project from the perspective of each of the major stakeholders. The financial assumptions are stated along with an overview of the government, project developer and community perspectives. Costs and benefits for each perspective were summarized in the form of net present values (NPV), which were calculated under various scenarios. It was found that the project was profitable for the government and community perspectives, and breakeven for the project developer, when carbon income was included. Major differences in NPVs between the assorted scenarios were analyzed and the sensitivities of those NPVs to changes in the stated assumptions were also tested. The fourth chapter details a proposed framework for valuing the additional ecosystem services that were not valued in the initial cost benefit analysis. An overview of those ecosystem services along with the various methods chosen to value each service is discussed. Benefit transfer was the main method employed to value the partial, indirect and non-use services. The section then details what literature estimates, data and calculations were used or are needed to derive the annual per hectare value provided by each service from healthy Ambaro-Ambanja Bay mangroves. The fifth chapter identifies the aspects of the project that might introduce risk to the long-term sustainability of the project. These risks include delayed benefits from the community perspective due to a 14 year project payback period, heavy reliance on carbon credit income for project profitability from the community perspective, and reliance on donor funding to break even from the project developer perspective. Proposed management considerations to mitigate these risks include project refinancing, potential development of an additional project income generating activity, and diversification of donor funding sources. This report makes several key points and recommendations: • Analyzing project profitability from the perspective of all major stakeholders is important in identifying where potential risks lie and who will be bearing those risks. • Although measures of net present value provide a simplified summary of the total discounted value received, it is critical to look deeper into the characteristics of the distribution of costs and benefits over time and the impacts it might have on stakeholders, especially those that are risk-averse. • Assumptions based on extremely volatile and new markets, such as the Voluntary Carbon Market, need to be made with caution and tested for project sensitivity. • Estimation and assessment of the total economic value (TEV) of all of the ecosystem services is needed to determine the true value of healthy mangroves in Ambaro-Ambanja Bay. The indirect value of these services and the impact of deforestation on that value need to be considered by the stakeholders.
Open Access
Accessing the viability of HTR - Indonesia's community-based forest plantation program
(2009-04-24T18:19:10Z) Schneck, Joshua
In Indonesia, development of sustainable supplies of timber has failed to keep pace with industrial demand. After decades of overharvesting and clearing to bridge supply gaps, Indonesia’s forests and forest industries are in a crisis, with declining stocks of timber to support forest-dependent livelihoods and biodiversity, and large recurring emissions of atmospheric CO2 linked to deforestation. The Indonesian Government’s strategy of providing incentives to developers of large-scale industrial timber plantations has been of limited success, with only 30% of state targets reached after nearly twenty years of work. Difficulties can be traced to conflicts over land rights at the community level, and the limited financial viability of plantation investments in markets distorted by illegal and cheaply-priced wood supplies. In an effort to address these obstacles, the Indonesian Government introduced a new community-based plantation program in 2007, Hutan Tanaman Rakyat (HTR), which affords local communities rights and incentives for developing timber plantations on community lands. Country-wide targets for HTR are substantial, with 5.4 million hectares of plantations planned, however substantial challenges lie ahead in identifying suitable areas of land, creating effective institutional arrangements, and ensuring economic viability. Here, we examine the financial viability of developing pulpwood plantations under HTR at 22 proposed sites in West Kalimantan, and consider challenges to implementing HTR on the ground by surveying a local plantation company operating under a partnership model similar to the kind proposed for HTR. Investments in all 22 sites yield negative net present values, indicating HTR is not profitable under current market conditions. Results suggest HTR may be best facilitated by accompanying macroeconomic and forest-sector policies which reduce market distortions, improve market transparency and liquidity, and raise domestic log prices.
Open Access
AN ANALYSIS OF THE SO2 CAP AND TRADE MARKETABLE PERMIT SCHEME: ARE HOT SPOTS A CONCERN?
(2012-04-24) Mackensen, Carl
My project determines if the sulfur dioxide cap and trade program causes hotspots within states and counties. SO2 is a regional pollutant, but no geographic or temporal restrictions were specified in the program. My data are from EPA, and include two datasets; state-level measurements on SO2 emissions and other explanatory variables, and county-level measurements in the same form. I ran regression to find which/how many states and counties SO2 levels increased. Stage 1 of the program (1995 to 1999) and stage 2 of the program (2000 to 2010) were compared to the base period of stage 0 (1980, 1985, 1990). I found that at the state-level, most experienced a significant drop in SO2 emissions during stage 1. Other states experienced significant increases in emissions at stage 1. No states experienced positive SO2 emissions during stage 2. At the county-level I found that some counties experienced an increase in SO2 emissions during stage 1. For the majority, emissions decreased. I also found that there were still a number of counties which experienced an increase in emissions during stage 2. This number was less than those positive-increase counties of stage 1. I also found that a number of states and counties experienced a net increase in pollution levels over the life of the program. Lastly, banking of permits in stage 1 for use in stage 2 did not occur at the state level. This did happen at the county level. Further analysis of the net and banking effects could serve as the basis of an additional paper. This, however, falls outside the realm of this analysis.
Open Access
AN ANALYSIS OF WILLINGNESS TO PAY AND REASONS FOR PURCHASING CERTIFIED FOREST PRODUCTS
(2014-04-25) Jason, Elliott
Currently, around half a billion acres are certified around the world by the world’s top three certification organizations and this number continues to grow rapidly every day. However, consumer knowledge of sustainable forest management and forest certification does not appear to be growing. This lack of consumer awareness could be the reason why there is little evidence of a price premium for certified forest products in the market. The non-existence of a price premium may discourage landowners from electing to have their forest certified as sustainably managed. In order to encourage consumers to pay more for certified forest products, it is necessary to disseminate information about the benefits of forest certification and how certified forests are managed sustainably. This study aims to determine how much a typical household consumer knows about forest certification and whether or not they would prefer certified forest products over non-certified products. To answer these questions, 100 individuals were surveyed in Durham, North Carolina during the spring of 2014 to determine their preferences for printer paper, which is a frequently purchased forest product. The results indicated that 48% of respondents have not heard of forest certification and only 3% knew a lot about it. This demonstrates that there are great marketing opportunities for certification organizations, manufacturers of certified forest products, and certified forest product carriers (e.g. Home Depot and Staples). In addition to surveying for knowledge about certification, respondents were given a hypothetical purchasing scenario where they were asked to either purchase a ream of certified paper or a ream of non-certified paper. The only things that varied about these types of paper was 1) the price of certified paper and 2) whether the paper was certified or not certified. 73 respondents stated that they preferred the certified paper over the non-certified paper and they would, on average, pay an additional $2.67 for certified paper. Of the respondents who chose the non-certified paper, they indicated that the reason they selected it was because the certified paper was too expensive and that they did not know enough about how certified forest management differs from non-certified forest management.
Open Access
An Economic Analysis of REDD Carbon Payments on Agricultural Expansion in Bolivia
(2009-04-22T18:48:05Z) Stich, Monica
As deforestation accounts for a significant percentage of worldwide carbon emissions, reducing emissions from deforestation and degradation (REDD) has been the focus of intense international debate. REDD programs offer a financial mechanism to compensate areas that would have been deforested for avoided carbon emissions above an established baseline. This study examined the feasibility of such a program in El Chore Forest Reserve in Bolivia, which faces destruction from the illegal seizure of land by poor immigrant farmers. Three main components were used to obtain a spatial distribution of the minimum price of carbon required for conservation (i.e. compensate for the opportunity cost of agriculture): estimation of biomass, prediction of deforestation, and calculation of the opportunity cost. A map of biomass was estimated by regressing spectral enhancements of 2007 satellite imagery on a spatially coarse reference map of the Amazon region. It was concluded that the reserve has an average biomass of 121.1 Mg biomass/ha with a standard deviation of 15.58. The spatial probability of future deforestation was calculated using a logistic analysis on deforestation between 2001 and 2004 based on biophysical variables. By applying a projection of area deforested per year based on historical trends, the results indicated the area that would be deforested. In the absence of intervention, it was predicted that 44% of the forest reserve would be converted to agriculture by 2036 (Kappa: 0.57). The opportunity cost was modeled using profit predictions of the four main crops (rice, soybean, maize, wheat). Depending on the crop, projections indicated that prices would increase 35-100% and yields were expected to increase 55-88% by 2040. Expected profits were scaled based on the suitability of the land by crop. The average opportunity cost for a three-year time period ranged from $904/ha in 2006 to $2143/ha in 2036. Using an economic model with an 8% discount rate the average price would need to be $21.17/tC. Since the biomass estimate is conservative, this is likely an upper bound on the price of carbon. These results could be used to inform the development of a carbon program and determine target areas for conservation initiatives.
Open Access
Application of OECD Guidance on the Material Flow Accounting(MFA): Case of the Republic of Korea
(2008-04-25T19:01:44Z) Noh, Heekyong
It is recognized that understanding the flow of materials into and out of the socio-economy is essential for reducing the stress to the environment, improving resource productivity and achieving sustainable development. Efforts are being made in the developed countries to develop the account of material flows, and OECD is preparing guidance manual on the material flow accounting to help countries with little experiences. Objective of this project is, based on the OECD guidance, to construct pilot material flow account, to analyze the progress toward sustainable development using indicators derived from the material flow accounting in comparison with EU countries and to make recommendations for further development of material flow accounting and related policies in Korea. The compiled national economy-wide material flow account by this project reveal the trend of total material input and consumption during the past 15 years in Korea. Total volume of material input and output increased by roughly 78% (0.72 billion tons) and 82% respectively during 1991-2005 period. Material use efficiency that means material input per GDP improved by 30% to 943 tons per million USD, but is still low when compared with average of EU countries. Material consumption per capita rose to 13.2 tons/year per person, which is close to EU average level. Overall, findings show the trend of relative dematerialization in which the rate of economic growth is bigger than that of material use, and the need of introducing vigorous decoupling policies that can reduce the material use while maintaining economic development. Accomplishments in this project will contribute to the future implementation of material flow accounting in Korea under the OECD guidance, with identified weaknesses in the current statistics system, areas of concern and related recommendations.
Open Access
'Balancing Biodiversity': A Global Instrument for Meeting the 2010 Biodiversity Target
(2008-04-25T17:45:57Z) Peterson, Annah; Hill, Chloe; Gallagher, Louise
Radically heightened extinction rates over the past 50 years have prompted the Convention on Biological Diversity to adopt the ‘2010 biodiversity target,’ which aims to significantly reduce global biodiversity loss by 2010. Despite the establishment of this ambitious goal, few policies have proven to be able to ensure its achievement. This paper explores the potential for biodiversity conservation policies to be developed on a global scale, with special emphasis on incentive-based instruments to curb biodiversity loss. By far, the primary cause of biodiversity loss is habitat destruction resulting from land-use change. Land-use change, however, occurs over a variety of spatial scales, making it difficult to utilise incentives in order to target the major actors engaging in land-use change activities. Specifically, land-use change is driven globally by international developers selling products for export, as well as locally by actors altering land to meet subsistence needs. In light of these two groups, the paper discusses the need for a two-pronged incentive system, which creates incentives for both international actors engaging in high-return development activities, particularly those from the private sector, and local actors engaging in lower-return subsistence activities. It then examines the potential for creating this two-prong incentive structure through the development of a global system of biodiversity offsets, referred to as ‘balancing biodiversity’. The paper concludes by establishing rudimentary guidelines for the implementation of such a system with the hope of initiating discussion over global instruments for meeting the 2010 target.
Open Access
Change in Trees Outside of Forests in India
(2023-04-26) Tregidgo, Grace
Open Access
Cincinnati Takes the Lead in LEED: Effects of a real estate tax abatement for LEED certification on development and green building
(2009-04-24T16:12:46Z) LaJeunesse, Katherine
Local governments have played an important role in the adoption of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Green Building Rating System. Many local governments offer incentives for the private sector to utilize this green building rating system, including density bonuses, expedited permitting, rebate of permit fees, and tax abatements. In May 2007, the City of Cincinnati, Ohio passed an ordinance that provides an automatic 15 year, 74% real estate tax abatement for commercial new construction that achieves LEED certification. Cincinnati’s LEED tax exemption program is unique because it combines a large tax break, available for a long period of time, for a relatively low level of achievement in the LEED rating system. The purpose of this project was to determine if Cincinnati’s LEED-CRA tax exemption program is encouraging LEED building within the City of Cincinnati and if it is promoting the use of green building practices through the LEED rating system. A comparison of the volume of LEED projects in Cincinnati and other large Ohio cities revealed that the instatement of the LEED-CRA tax abatement program is likely to have had an effect on the recent upward trend in LEED-registered projects in Cincinnati. Owners of LEED-registered projects and developers without LEED projects in the Cincinnati area were surveyed, with the goal of finding out their motivations for building LEED and their perceptions of the City’s tax abatement program. Most respondents liked Cincinnati’s current LEED tax abatement program, highlighting it as a simple and easy-to-use program. They thought the program was a motivating factor within the City limits, which may be one indicator of the program’s success as an economic development tool. The tax abatement was also found to be an incentive to use the LEED certification system on projects that would otherwise not have been built to LEED standards.
Open Access
Does Religion Play a Part in U.S. Environmental Policymaking? The Effect of Religiously Motivated Campaign Contributions on Congressional Environmental Voting Patterns
(2012-04-27) Fields, Fletcher
Beginning in 1967 with Lynn White’s seminal paper, religious leaders, environmentalists, and scholars have debated whether religion plays a positive or negative role in the environmental crisis. While existing literature presents several philosophical and theological rationales for both sides, the sheer scope of this question has hindered the development of empirical research. Focusing on a specific aspect of the issue, however, allows for the formulation of a meaningful observational analysis. Using a fixed-effects model, this study examines how religiously motivated campaign contributions influence environmental voting patterns in the U.S. Congress over a 20-year period (1990-2010). While they seem to hold no bearing in the Senate, results indicate that donations from religious organizations lead to a statistically significant albeit relatively small decrease in a Representative’s propensity to vote in favor of environmental legislation. So while religion is not the only piece of the puzzle, it does exert some influence over environmental policymaking in the U.S. These findings support Lynn White’s hypothesis that, at least in the political realm, religion has a negative impact on environmentalism.
Open Access
Economic Analysis of Conservation Developments in Western North Carolina
(2008-04-25T13:12:10Z) Thompson, Rachel
The growth rate in western North Carolina has risen 20% in the past 10 years. This drastic increase has led to an alarming rate of development causing the degradation of many of the natural habitats that are native to western North Carolina. In order to curb some of this degradation development needs to become more sustainable towards the environment. Conservation developments, which are housing developments that place environmental protection as their first priority, are one way to become more sustainable. The economic analysis is done for developers and for society to try and show the economic benefits associated with conservation developments. A cost comparison is done on two different developments, a hedonic pricing model is used to evaluate price premiums and an evaluation of carbon benefits are all used as part of the analysis. The results indicate that it is cheaper to build conservation developments and they sell for a 39% price premium. Unfortunately, conservation developments do not gain as much profit as conventional developments due to the difference in housing density. Even with the addition of carbon sequestration values, which are greater in conservation developments, the profits are still less. It is important for conservation developments to be supported in this area since they are much more sensitive to the too often degraded landscape.
Embargo
Economic Co-Benefits of Nature-Based Carbon Removal Projects in the Brazilian Amazon
(2023-04-28) Audie, Michael Jr; Rao, Abhay Venkatesh; Singh, Anant Pratap; Valby, Nick
Mombak is a Brazil-based carbon removal startup with a mission to reforest the Amazon through the conversion of unproductive, low-yield farmland back into rainforest. Their business model relies heavily on the sale of carbon credits on the voluntary carbon market (VCM) to multi-national companies with net-zero targets. While carbon removal projects generally garner a price premium on the VCM as compared to carbon reduction projects, price levels among all offsets remain stubbornly low due both to lack of government policy intervention as well as the nascent and inefficient nature of the VCM. Nature-based solutions, as Mombak offers, additionally generate co-benefits which are of economic value to communities locally and abroad. Through a review of the most relevant economic valuation studies on the Amazon rainforest, this analysis seeks to answer what value added a Mombak carbon credit may generate beyond just its ability to sequester carbon. Our findings demonstrate that the value to society of a Mombak carbon credit far exceeds what is reflected by the VCM today and suggest that a price premium for a Mombak generated carbon credit is more than justified.
Open Access
Economic Input-Output Analysis of China's CO2 Emissions
(2013-04-25) A, Rouna
China, as the biggest GHG emitter and the largest developing country, has been urged by international society to take responsibilities for reducing GHG, especially in the post-Kyoto commitment period. Currently, the United Nations Framework Convention on Climate Change (UNFCCC) assigns the responsibility to parties who produce the GHG, using the production-based GHG emissions inventories. However, some scholars argue that if consumption-based GHG emissions inventories were used, China would be less responsible for GHG emissions because GHG emissions embedded in exporting products directly contribute to its total emissions. This paper analyzes China’s CO2 emissions in 2007 using Economic Input-Output (EIO) method, and finds that China’s domestic emissions make up a large proportion of total emissions, and export-embodied emissions accounts for 15% of domestic emissions. What’s more, results of production-based accounting method are different from results of consumption-based accounting method. These two different methods mainly impact the emissions from regions that belong to eastern China. If China attempts to implement environmental policies to achieve the emissions reduction target, different regional characteristics need to be considered.
Open Access
Economic Valuation of Mangrove-Fishery Linkages in Guyana and Suriname
(2019-04-24) Bollini, Celeste; Millar, Emily
Mangroves are among the most productive ecosystems in the word. By providing valuable ecosystem services, mangroves enhance human well-being and contribute to biodiversity conservation in the tropical and subtropical regions where they are found. Mangroves provide nursery, feeding, breeding grounds, and shelter areas for many marine species, which in turn enhances the productivity of traditional and commercial fisheries. The objective of the present study is to evaluate how mangrove ecosystems affect fisheries in Guyana and Suriname, as part of a collaborative project between the Nicholas Institute for Environmental Policy Solutions and Conservation International. The evaluation involved conducting a meta-analysis of information drawn from 21 mangrove-fishery linkage studies from around the world to estimate a general model relating fish catch to mangrove area. A benefit transfer method was then used to apply the results from the meta-analysis to recent and projected future changes in mangrove areas in Guyana and Suriname, and thereby predict the impacts on fish catch in the two countries. The first section of this report provides an overview of mangrove ecosystems, definitions of the four types of ecosystem services identified by the Millennium Ecosystem Assessment, and an outline of the ecosystem services provided exclusively by mangroves. This section also highlights some of the main global drivers of mangrove loss. Lastly, it provides the main objectives of this project, an overview of Guyana and Suriname, and estimates of the areas and trends in mangroves in both countries. Mangrove area change was calculated using the average of estimates from two sources for each country. The estimated changes in mangrove area during 2000-2017 were -1.96% per year in Guyana and -0.76% per year in Suriname. The second section of this report describes the methods used to determine how these trends have affected fisheries in Guyana and Suriname. After providing an overview of the meta-analysis and benefit transfer methods, this section explains the variables selected for the meta-analysis. Variables were selected to capture essential characteristics of the study sites and the studies themselves. Finally, the equation estimated by the meta-analysis is defined. This equation relates the impacts of mangrove area reported by the studies to the selected variables. Observations were included in the dataset for estimating this equation only if a study included sufficient information for calculating the reported impact as an elasticity, which can be explained as follows: denoting the elasticity by Ɛ, a 1% increase in mangrove area increases fish catch by Ɛ%. The third section of this report applies the results from the meta-analysis to calculate the benefit transfer estimates for each country. There are two final models: a shellfish model and a finfish model. The shellfish model was used to generate the estimate for Guyana, while the finfish model was used to generate the estimate for Suriname. For Guyana, the predicted elasticity (Ɛ) is 0.924, which implies a 1.81% loss in shellfish catch per year resulting from the recent loss of mangroves in that country. For Suriname, the predicted elasticity (Ɛ) is 1.77, which implies a 1.34% loss in finfish catch per year resulting from that country’s recent loss of mangroves. These estimated losses in fish catch were calculated by multiplying each country’s elasticity by the observed changes in mangrove area noted previously. The fourth section of this study provides a discussion of the analysis and estimates the benefits of mangrove restoration in each country. If the estimated loss in mangrove area had not occurred in Guyana, the Guyanese fishery would have gained $586,440 in revenue net of costs. Similarly, if the estimated loss in mangrove area had not occurred in Suriname, the fishery in that country would have gained $180,900 in revenue net of costs. This section also provides a comparison to previous mangrove-fishery linkage studies. This is followed by a discussion of limitations of the present study, including the wide variation in mangrove area and mangrove area change estimates found in different sources. Lastly, recommendations for future data collection are provided. The final section of this study provides an insight into mangrove-fishery linkages within the countries of Guyana and Suriname for specific fisheries as well as the associated monetary gains resulting from conserving mangrove area. These estimates are insufficient for determining the total value of conserving mangrove area, but a more complete estimate of total value could be determined by applying valuation methods, similar to those used in this study, to additional ecosystem services.
Open Access
Estimating the Opportunity Cost of Lithium Extraction in the Salar de Uyuni, Bolivia
(2009-12-04T05:15:30Z) Aguilar-Fernandez, Rodrigo
If the world plans to be moving away from oil based transport and towards hybrid and electric vehicles, lithium supply is the key factor. The Salar de Uyuni in Bolivia holds the largest source of lithium in the world; however, its extraction will bring a trade off with the environment. Due to the arid nature of the climate, the Salar de Uyuni basin has a sensitive ecosystem heavily dependent on water resources. Consequently, local people’s subsistence and well-being also depend on water resources on a daily basis. Studies conducted in the Salar de Uyuni basin concluded that using the same spring as a production input, water consumption for lithium extraction and crop irrigation cannot simultaneously take place. Thus, the fresh water use from the San Geronimo River creates two mutually exclusive projects, lithium mining and quinoa crop with irrigation, generating different gains to the economy of the region. The incremental cash flows model used in this study provides an estimate of the benefits that each project would provide. The results indicate that even after subtracting the opportunity cost of not conducting the quinoa irrigation project and reducing the uncertainty of the model parameters, the net present value (NPV) of the lithium extraction project is still positive and large relative to the economy of the study area. Nevertheless, the distributional and social differences have to be carefully assessed in the future according to the ecosystem services and the financial model described in this study. In order to incorporate market distortions and foreign exchange implications on the financial model, further economic research is required on both projects. Finally, water resources and its competing uses should be recognized as an economic good, so it could be managed more efficiently and used more equitably in this ecosystem.
Open Access
Evalutation of payments for ecosystem services in the valley region of Bolivia
(2009-04-24T15:57:48Z) Hoffman, Cassie Ann
Market based mechanisms are proliferating around the globe as a means to offer direct economic incentives for protecting and conserving ecosystem services. Among the ecosystem services being marketed, payments for watershed services (PWS) are the most difficult to establish clear service provision. Most PWS use a land-based compensation method, assuming that specific land management practices will result in the desired watershed services. Past evaluations of financial benefits for PWS service providers have suggested that payments have been relatively insignificant when compared to income or opportunity costs of market participants. This report explores whether the payment employed in a PWS implemented by the non-governmental organization Fundación Natura in the Los Negros watershed of Bolivia offers significant incentive to conserve forest cover and has the ability to meet landowners’ opportunity cost of alternative uses of land. Since 2003, upstream farmers have enrolled parcels of land and been compensated $3 per hectare per year for conserving forest cover. In 2008, sixty-two farm surveys were completed and their location geo-referenced in the Los Negros watershed to determine annual net farm income per hectare as a measure of marginal opportunity cost to land. Opportunity costs were modeled using biophysical characteristics of farm parcels, economic parameters of the market and distances to roads. The model was used to map opportunity costs across the watershed. The economic model predicted significant variation in opportunity cost across the Los Negros watershed with a range of US $0 to $8493 per hectare. The majority of landowners were overcompensated with 75% of the area in conservation carrying opportunity costs of US $0 per hectare. Other areas are significantly under-compensated at the current compensation rate and could be under the highest threat of deforestation. While increased cost effectiveness could be achieved and more meaningful incentives offered to landowners by differentiating compensation, consideration should be given to non-financial benefits of the PWS, such as strengthened property rights, as well as the political costs of price differentiation.
Open Access
Growing Poplar for Growing Markets: A Study of Sawmill Production and Market Dynamics
(2015-04-24) Rinaldi, Michael
This project conducts a market analysis of Pacific Albus and investigates the statistical relationship between timber inputs and lumber outputs at GreenWood Resources’ Upper Columbia Mill. The market analysis was done to gain a better understanding of the Pacific Albus and to identify future opportunities for it to gain market share given its competitiveness with alder, aspen, and other species; both in terms of end-use functionality and price. This study also developed an enhanced product recovery model for Pacific Albus that describes how log measurement variables statistically explain the board feet recovered and the composition of those products. By doing so, it may be possible to estimate recovered lumber volume and value of Pacific Albus trees by taking a few simple measurements.
Open Access
Linking Forest Restoration to Sustainable Value Chains with se.plan
(2023-04-28) Caradine, Reed; Ezekiel, Micah; Piacsek, Gabriel; Wang, Meixin
Stumpage prices for timber can be low due to lack of demand for wood products, which threatens the sustainability of tree-growing projects. Prices can increase with more investment in local wood processing facilities and related infrastructure – the links in the value chain that would increase timber demand. se.plan, a geospatial tool built by the UN Food and Agriculture Organization (FAO) Forestry Division, helps investors find suitable locations for reforestation projects in emerging markets, but it does not have the capability to help find locations for wood processing facilities. Using Uganda as a case study, we augment the capabilities of se.plan and provide geospatial data to build a wood processing facility siting capability into the tool. To determine decision-making factors relevant to investments in reforestation and wood processing, we conducted a literature review and focus groups, and then we found and modified geospatial datasets relevant to those factors. We made recommendations on how FAO can incorporate the datasets into se.plan.
Open Access
Mangroves in Ecuador: An application and comparison of ecosystem service models
(2015-04-21) Burgess, Paul; Li, Xiangyi; Qin, Siyu
Mangroves provide an abundant supply of ecosystem services such as coastal protection, fish nursery, recreation, and carbon sequestration. After a severe loss of mangroves predominately due to shrimp farming from 1969 to 2000, Ecuador realized the importance of mangroves and their related ecosystem services. In response, the government’s interest grew to understand ecosystem services valuation (ESV) models that provide robust valuation for the ecosystem services(ES). Working with the Conservation Strategy Fund (CSF), this report identified and evaluated applicable ESV models, valued and mapped the ecosystem services values of Ecuadorian mangrove with ESV models. This report aims to calculate the value of ecosystem services of mangroves with the existing modeling tools. The following models were initially considered: InVEST, AIRES, MIMES, Co$ting Nature, EcoServ, LUCI, and SolVES. Each model is different, and therefore likely to generate a different valuation of ecosystem services for the same area. In addition, the report compared the variance within models for four different scenarios: status-quo, lose-all, reforestation, full-recovery. Results include both numerical information and highlight the usefulness of each different modeling tool. Based on results and analyses, suggestions are made on suitable ESV models for mangrove ecosystems, and decision support information are provided to Socio Manglar program of Ministry of Environment of Ecuador.

Browsing by Author "Vincent, Jeffrey"

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