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Payments for environmental services: empirical analysis for Costa Rica

Alexander Pfaff, Juan A. Robalino, G. Arturo Sanchez-Azofeifa


Abstract: Based upon observed and projected rates of deforestation, we find that the institutionally innovative PSA (payments for environmental services) program in Costa Rica has had very little impact. Reasons include: the low background deforestation rate, which is due in part to other government policies; the lack of targeting within the PSA; and the goal of transferring some surplus to landowners. Such pioneering efforts could raise their impacts by targeting areas of relatively high deforestation pressure, although this would alter the distribution of surplus.

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