This research analyzes private and social costs of forest conservation in Yaque del Norte watershed, DR. It calculates private costs as average annual income from farming activities and social costs as the externalities from erosion and CO2 emissions. Social cost estimates are based on the difference in erosion and CO2 between conserved forest and other land use categories. The effect of soil erosion on the wellbeing of people is measured by its effect on reduced space at Tavera dam for water availability to generate electricity and to irrigate agricultural lands downstream. The social cost of increased annual carbon emission from potential land use change is estimated using IPCC default emission factors and social cost of carbon estimates. Private costs are inferred from a nonlinear binary response model that estimates the relative importance of factors affecting forest conservation decisions of households. Results show that payment level, measured through rental value, is not significant for landholders' decisions to sign a PES contract. Annual cropland is the most profitable land use in the area. Other important, but less profitable, land covers are pasture, coffee and managed forest. Cropland also generates the highest cost for society in terms of erosion and CO2 emissions. The comparison of private and social costs shows that only livestock generates a social cost that exceeds average private income. If forest conservation were to be justified based on social benefits, the analysis must include a more comprehensive assessment of what people value from conserved forest in YNW, such as the effect of erosion for water treatment costs. Any proposal to retain forests social benefits, such as REDD+ initiative, should take into account the high cost forgone by forest owners when deciding the distribution of benefits of carbon sequestration. / Master of Science / Environmental services generate benefits for both private and public entities, which increases the complexity of calculating optimal levels for payment for environmental services (PES). A pilot PES project in the Yaque del Norte watershed of the Dominican Republic is an excellent example of this complexity; with benefits from upland forest conservation accruing to a hydroelectric company, a water supply company, and society at large. Reducing soil erosion through forest conservation can preserve dam capacity for hydro-electric power generation, preserve water quality and lower treatment costs, and reduce the global economic costs of CO₂ emissions. This study evaluates the socio-economic costs of forestland conservation in the Yaque del Norte catchment. The social benefits of carbon stored under forest land are compared to benefits under alternative land uses. In addition, forest land benefits from erosion prevention are estimated using a Universal Soil Loss Equation. Calculated benefits from forestland conservation are then compared to landuse opportunity cost estimates generated through a farm-level survey in the area. Study results show that the opportunity cost of forest conservation in the Yaque del Norte is high; ranging from between RD$10,000 and RD$200,000 per hectare per year. If society values carbon and soil retention as the direct benefits drawn from conserved forest, only lands with low very opportunity costs will be conserved. However, inclusion of the indirect external benefits of forestland conversion suggests that in many cases forest conservation generates greater social benefits than the private benefits associated with alternative land uses from conversion. PES payment levels of RD$5,000/ha/yr that internalize these external social benefits to forest land holders appear to be sufficient to preserve a significant share of current land and generate net social benefits. Further, part of the costs of these PES payments can be borne by hydro-electric and water companies, as they benefit directly from forest land conservation.
| Identifer | oai:union.ndltd.org:VTETD/oai:vtechworks.lib.vt.edu:10919/85240 |
| Date | 04 October 2018 |
| Creators | Rosario de De Jesus, Santa Felicita |
| Contributors | Agricultural and Applied Economics, Mills, Bradford F., Norton, George W., Franco, Carol |
| Publisher | Virginia Tech |
| Source Sets | Virginia Tech Theses and Dissertation |
| Detected Language | English |
| Type | Thesis |
| Format | ETD, application/pdf |
| Rights | In Copyright, http://rightsstatements.org/vocab/InC/1.0/ |
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