Willingness of upstream and downstream resource managers to engage in compensation schemes for environmental services

Abstract

Providing compensation for land conservation practices adopted by upstream farmers is still an alien concept in the Thai political context. The governance of common-pool natural resources, such as forest and water, has traditionally been under the control of powerful government line agencies, while the contribution of local communities to natural resource conservation have been hardly recognized by policy-makers. Drawing on a case study in Mae Sa watershed, Chiang Mai province, northern Thailand, this paper discusses the potential of developing compensation schemes in a socio-political context where upland farmers-mostly belonging to ethnic minority groups-tend to be considered a threat to the natural resource base rather than providers of environmental services. Based on data obtained from 371 farm households in the upstream communities and 151 farm households 42 Chapika Sangkapitux et al. in the downstream communities of the watershed, upstream resource managers' willingness to accept compensation for the conservation measures and downstream resource managers' willingness to pay for water resource improvements were estimated through the use of choice experiments. Results from the study suggest that downstream resource managers would be willing to provide on average nearly 1% of their annual income for a substantial improvement of the quantity and quality of water resources, which could be achieved by compensating upstream farmers' change of their agricultural systems towards more environment-friendly practices. Both willingness to pay of downstream respondents and willingness of upstream resource managers to accept compensation were positively correlated with age, education, participation in environmental conservation activities and previous experiences with droughts and/or erosion. The paper concludes that there is a potential for establishing compensation schemes for provision of environmental services in northern Thai watersheds if other actors, such as private businesses and local administration, contribute a substantial share of the budget and if all relevant stakeholders get involved in the institutional design of compensation schemes.

Farmers’ and Consumers’ Preferences for Drinking Water Quality Improvement through Land Management Practices: The Case Study of the Soyang Watershed in South Korea

“…It implied that the water quality in all of the income levels was an important factor for the choice option of the respondents. This was in line with the previous studies, which showed that the customer placed a high value on maintaining a clean water supply [15][16][17][18][19]. The concern for the water quality of the watershed in the study regions, as well as the lack of significant differences in the MWTA between the upstream and downstream residents, could have been explained by the importance of the drinking water use.…”

“…Several studies examined the households' preferences of the heterogeneous water attributes [16] and estimated their marginal WTP using CE [17]. Some studies elicited a WTA compensation for the conversion from conventional to environment-friendly agricultural practices, and compared this with the WTP for the water quality [18,19]. However, few studies have investigated the willingness to accept the water quality improvement by providing hypothetical scenarios with several choice sets simultaneously, to both the upstream resource managers and downstream water users.…”

Differences in demand for watershed services: Understanding preferences through a choice experiment in the Koshi Basin of Nepal

“…We also estimated conditional logit models, but the results are similar to the RPL models. In the RPL model, we introduce individual characteristics including age, education, gender, demand for services and income variables including house type and farm size because they can influence the selection of alternative services (Rai and Scarborough, 2013;Sangkapitux et al, 2009). By allowing selected socio-economic variables to interact with the ASC and selected attributes, we identify sources of heterogeneity in decisions.…”

Financing Watershed Services in the Foothills of the Himalayas

“…The attributes identified in this experiment were the water quantity, quality, erosion from landslides and cost of the water tariff. A vector of socio-economic variables (s i ), based on linkages with welfare changes and natural resource management [39,40], controlled for household heterogeneity. The socio-economic control variables included were household income, gender, age and drinking water use, and the coefficient (γ) reflected their effects.…”