Environmental and Natural Resource Degradation in Intensive Agriculture in Bangladesh

Bangladeshi agriculture has undergone a substantial intensification. Continued and accelerated agricultural growth will require intensification to continue. There has been rising concern, however, that intensive agriculture may not be sustainable and that it may be damaging to the environment or to other productive sectors. Rising average yields and rising production in Bangladesh have tended to mask evidence of declining productivity. Although data are weak, numerous sources of evidence point to declining productivity. Analysis of official data on yield trends at the district level shows that, despite rising input levels, yields have been declining or stagnant on about two-thirds of the area planted to modern varieties in the boro season in the last decade, and stagnant throughout the country in the aman season. Yield declines are strongly associated with the length of time that intensive production practices have been employed in each district. The results of long-term trials by the Bangladesh Rice Research Institute (BRRI) also indicate that intensive rice cultivation can result in declining yields, even under good management and with full recommended doses of all nutrients being applied. Farmer perceptions also support this conclusion: farmers often claim that yields have been declining and that higher fertilizer applications are necessary to maintain yields. Stagnant or declining yields in the context of rising inputs indicate that land degradation is reducing productivity; if increases in input use had not counteracted the effects of degradation, yields might have fallen even further. This evidence is consistent with patterns of yield change in other Green Revolution countries, many of which have also experienced a slowdown in the rate of growth of production and yield, and with research at the International Rice Research Institute (IRRI). There is considerable debate over the exact causes of declining productivity. In Bangladesh, the most likely cause is nutrient imbalances. High-yielding modern varieties are far more demanding of soil nutrients than much lower yielding local varieties had been, a problem worsened by the increasing prevalence of multiple cropping. Chemical fertilizer use has increased, but not sufficiently to compensate for the higher rates of offtake, and has been offset by decreasing organic content of the soils as a result of reductions in applications of farmyard manure, which is in increasing demand for use as fuel, and increased protection against flooding, which has reduced the deposition of organic matter content from flood waters. In general, applications of nitrogen are adequate but those of other nutrients often are not. Changes in soil physical and chemical properties, such as changing quality and quantity of organic matter and formation of a plowpan, also play a role in declining yields.Intensification, Land Use, Sustainability, Yields, Rice, Bangladesh

Payments for Environmental Services in Costa Rica

Costa Rica pioneered the use of the payments for environmental services (PES) approach in developing countries by establishing a formal, country-wide program of payments, the PSA program. The PSA program has worked hard to develop mechanisms to charge the users of environmental services for the services they receive. It has made substantial progress in charging water users, and more limited progress in charging biodiversity and carbon sequestration users. Because of the way it makes payments to service providers (using approaches largely inherited from earlier programs), however, the PSA program has considerable room for improvement in the efficiency with which it generates environmental services. With experience, many of these weaknesses are being gradually corrected as the PSA program evolves towards a much more targeted and differentiated program. An important lesson is the need to be flexible and to adapt to lessons learned and to changing circumstances.Payments for Environmental Services; Costa Rica; FONAFIFO

Land Use Change in Indonesia

With an estimated loss of up to 20 million ha of forest over the past decade, deforestation in Indonesia has come to the forefront of global environmental concerns. Indonesia is one of the most important areas of tropical forests worldwide. In addition to providing a multitude of benefits locally, including both products and services, these forests are also of global importance because of their biodiversity and the carbon they sequester. Despite the benefits they provide, Indonesia’s forests have been under considerable threat in past decades, and the extent of forest cover has declined considerably. This paper takes advantage of new data on the extent and distribution of forest cover change in Indonesia to examine its causes and effects. The paper begins by summarizing the long-term trends in land use change in Indonesia, and the new data on loss of forest cover during the period 1985-1997. It then discusses why this land use change is likely to be undesirable in many cases. Land use change can at times be beneficial, but there are good reasons to believe that current patterns of land use change in Indonesia are in fact socially sub-optimal. The paper then reviews the incentives faced by the major actors in land use change—loggers, estate crop producers, and smallholders—and the reasons their decisions concerning land use change, while privately optimal, are likely to be socially sub-optimal. It also briefly examines the effect that the East Asian financial crisis has had on these incentives. Particular attention is paid to mangrove forests, because of their important ecological role.Deforestation, Land Use, Biodiversity, Environmental Services, Indonesia

Economic Analysis of Rural Land Administration Projects

As part of its efforts to improve the rural economies of its client countries, the World Bank is supporting programs to strengthen land administration and undertake land reform. Land administration projects can include a variety of activities. Usually, the most expensive and that which is most likely to have direct, tangible benefits is land titling. The provision of titles to landowners is only part of complex process, however. Titles by themselves are unlikely to bring lasting benefits unless there is a functioning registry and cadastre and a system to adjudicate disputes. Land titling can generate many benefits, including improved efficiency of land markets, reduction in conflict over land, enhanced access to credit, and improved incentives to invest in agricultural production. Where the conditions are appropriate, titling can bring important benefits. Conditions, however, are not always appropriate. Moreover, land administration projects can be quite costly. Carrying out an economic analysis is necessary to determine whether the benefits to be achieved in a given situation are sufficient to justify the costs. Until recently, however, economic analyses have generally not been carried out for land administration projects. This manual explains the principles and approach that such an economic analysis should follow.Land tenure, titling, credit, sustainability, Thailand, Guatemala

Using contingent valuation in the design of payments for environmental services mechanisms: a review and assessment

In this paper we review CV studies conducted in the context of PES programs, almost all of which attempt to estimate the demand of downstream water users for upstream watershed protection and, more generally, for improved water services. Our objective is to assess the quality of these CV-PES studies, and their usefulness for designing PES programs.payments for environmental services; contingent valuation; stated preferences; water users; willingness to pay

A Review of the Valuation of Environmental Costs and Benefits in World Bank Projects

The World Bank’s Operational Policy on Economic Evaluation of Investment Operations requires that project evaluations include all the costs and benefits generated by the project, including environmental costs and benefits. Theis review examines the use of environmental valuation in 101 projects in the World Bank’s environmental portfolio approved in fiscal years 2000, 2001, and 2002. It has three broad objectives. First, it examines the extent to which environmental costs and benefits have been incorporated in the economic analysis of projects. Second, it examines how well valuation was used. Third, it seeks to identify areas of weakness so as to feed into plans for capacity building. The results show that the use of environmental valuation has increased substantially in the last decade. Ten years ago, one project in 162 used environmental valuation. In recent years, as many as one third of the projects in the environmental portfolio did so. While this represents a substantial improvement, there remains considerable scope for growth.environmental economics, valuation of environmental impacts, cost-benefit analysis

Poor household participation in payments for environmental services in Nicaragua and Colombia

We evaluate the extent to which poor households are able to participate in Payments for Environmental Services (PES) scheme using data from a PES scheme implemented at two sites in Latin America. This allows us to compare environmental and livelihood impacts of PES across regions with different agronomic and socio-economic characteristics. In particular, one of our sites is composed almost entirely of poor or extremely poor households, while the other has households ranging from extremely poor to very well off. The results show that poorer households are in fact able to participate—indeed, by some measures they participated to a greater extent than better-off households. Moreover, their participation was not limited to the simpler, least expensive options. Extremely poor households had a somewhat greater difficulty in participating, but even in their case the difference is solely a relative one. Transaction costs may be greater obstacles to the participation of poorer households than household-specific constraints.Payments for environmental services, PES, poverty, silvopastoral

Mapping environmental services in Guatemala

In this paper, we use data from Guatemala to map areas that are important for the provision of indirect ecosystem services—services whose benefits are enjoyed at some distance from the ecosystem that provides them, such as watershed services (enjoyed downstream) or biodiversity conservation (enjoyed globally). These services are usually externalities from the perspective of land users, and so tend to be under-provided. Mapping the areas that supply such services links the supply and demand of ecosystem services in a spatially explicit way, allowing us to identify and prioritize areas of conservation interest.environmental services, mapping, gis, guatemala, watershed

Assessing the Potential for Payments for Watershed Services to Reduce Poverty in Guatemala

Payments for Environmental Services (PES) are being increasingly used as conservation instruments, particularly in Latin America. PES programs seek to capture part of the benefits derived from environmental services and channel them to natural resource managers who generate these services, thus increasing their incentive to conserve them. Many have assumed that these payments would go mostly to poor land users, and thus contribute to poverty reduction. There has been little empirical verification of this assumption to date, however. The PES approach was conceptualized as a mechanism to improve the efficiency of natural resource management, and not as a mechanism for poverty reduction. Pagiola et al. (2005) identified three main questions regarding the linkages between PES and poverty: (1) Who are the actual and potential participants in PES programs, and how many of them are poor? (2) Are poorer households able to participate in PES programs? And (3) are poor households affected indirectly by PES programs? We focus here on the first question of eligibility. This study examines whether the recipients of payments for environmental services are likely to be poor. Our focus is on watershed-scale PES mechanisms in which water users make payments to service providers. In Guatemala, as in other countries, it has long been argued that land users in marginal areas such as the steep slopes of upper watersheds tend to be poor. We use data from highland Guatemala to examine this assumed close spatial correlation between areas of high poverty and areas that provide environmental services. We first identify specific watershed areas in which PES mechanisms could potentially be developed, based on the presence of major downstream water uses such as hydroelectric power generation, domestic water supply, and irrigation. We then compare these areas with the spatial distribution of poverty in the country, allowing us to ask two questions that are central to the potential for PES to reach the poor: (1) How many of the potential providers of water services are poor? The local poverty impact of a PES program on poverty will depend on whether potential providers are poor or not. And (2) how many of the poor are potential water service providers? The potential impact of PES on poverty at a national scale will depend on whether many of the poor are in fact in areas where PES mechanisms might be implemented. Even if most potential PES recipients are poor, it may be that few of the poor are potential PES recipients. We map the ‘water supply areas’ by identifying the location of the intakes from which users obtain their water and then delineating the portions of the watershed that contribute to those intakes. About 1.9 million ha have significant potential for development of PES mechanisms through the presence of major water uses. This area is under-estimated as data could only be obtained for a subset of all users. All water supply areas are not equivalent. Some have substantial potential for PES because of the importance of downstream water uses, while others have more limited potential. For each user, we collect information on the nature and magnitude of their water use and construct use-specific indices of the relative importance or “value” of water supply areas. With about 56% of its population under the poverty line, Guatemala has one of the highest poverty rates in Central America. Using the watershed-level poverty map developed by Nelson and Chomitz (2007), we analyze both the poverty rate and the poverty density in water supply areas. Our analysis shows that both the poverty rate and the poverty density in the water supply areas vary substantially. The average poverty rate in water supply areas is only 44 percent, which is lower than the national average of 53%. There is essentially no correlation between the importance of a water supply area and the poverty rate of people living within it. The total number of poor that could potentially be reached if PES mechanisms were developed in all water supply areas is about 1.76 million, or 73% of the country’s poor. This analysis only considers the potential for PES programs to reach the poor. Even where many of the potential service providers are poor, it does not follow that the poor will get the benefits. A variety of obstacles, including insecure land tenure, lack of title, small farm holdings, and lack of access to credit might limit the participation by the poor in a PES program. The extent to which these problems prove to be obstacles in practice depends on the specific characteristics of the PES program and the conditions under which it is implemented. References: Nelson and Chomitz. 2007. Environment, Development and Sustainability 9(4): 369. Pagiola et al. 2005. World Development 33(2): 237.Payments for Environmental Services (PES), watershed, poverty, Guatemala, Environmental Economics and Policy, International Development,

Assessing the Economic Value of Ecosystem Conservation

Valuation studies have considerably increased our knowledge of the value of ecosystems. Their usefulness has often been undermined, however, by a failure to properly frame them so as to address the specific question of interest. Valuation is not a single activity, and the seemingly simple question ‘how valuable is an ecosystem?’ can be interpreted in many different ways. This paper seeks to clarify how valuation should be conducted to answer specific policy questions. In particular, it looks at how valuation should be used to examine four distinct aspects of the value of ecosystems: (1) Determining the value of the total flow of benefits from ecosystems. This question typically arises in a ‘national accounts’ context: How much are ecosystems contributing to economic activity? It is most often asked at the national level, but can also be asked at the global, regional, or local level. (2) Determining the net benefits of interventions that alter ecosystem conditions. This question typically arises in a project or policy context: Would the benefits of a given conservation investment, regulation, or incentive justify its costs? It differs fundamentally from the previous question in that it asks about changes in flows of costs and benefits, rather than the sum total value of flows. (3) Examining how the costs and benefits of ecosystems are distributed. Different stakeholder groups often perceive very different costs and benefits from ecosystems. Understanding the magnitude and mix of net benefits received by particular groups is important for two reasons. From a practical perspective, groups that stand to ‘lose’ from conservation may seek to undermine it. Understanding which groups are motivated to conserve or destroy an ecosystem, and why, can help to design more effective conservation approaches. From an equity perspective, the impact of conservation on particular groups such as the poor, or indigenous peoples, is also often of significant concern in and of itself. (4) Identifying potential financing sources for conservation. Knowing that ecosystem services are valuable is of little use if it does not lead to real investments in conserving the natural ecosystems that provide them. Simply knowing that a protected area provides valuable watershed protection benefits, for example, does not pay the salaries of park rangers. Yet experience has shown that relying solely on government budget allocations or external donors for the necessary funding is risky. Valuation can help identify the beneficiaries of conservation and the magnitude of the benefits they receive, and thus help design mechanisms to capture some of these benefits and make them available for conservation. These four approaches are closely linked and build on each othe, often using similar data. They use that data in very different ways, however, sometimes looking at all of it, sometimes at a subset, sometimes looking at a snapshot, and sometimes looking at changes over time. Each approach has its uses and its limitations. Understanding under what conditions one approach should be used rather than another is critical: the answer obtained under one approach, no matter how well conducted, is generally meaningless when applied to problems that are better treated using another approach. In particular, using estimates of total flows to justify specific conservation decisions—although commonly done—is almost always wrong. Properly used, however, valuation can provide invaluable insights into conservation issues.ecosystem, valuation