@article{96d6050fbfe94762bd8e12cd3fa45340,
title = "Households{\textquoteright} preferences for hydrological services in Veracruz, Mexico: The importance of outcomes vs. program design",
abstract = "Payments for Ecosystem Services (PES) are transfer payments that incentivize natural resource owners and managers to carry out environmental conservation efforts that promote ecosystem service provision. A common issue that PES programs face is long-term financial sustainability. In the case of payments for hydrological services (PHS), this may be achieved by introducing fees in the water bill of water users and using the money to pay landowners to conserve their forests and the hydrological services they provide. However, these fees are often minuscule and chosen arbitrarily without assessing households' preferences for the outcomes and design of the programs that manage them. While programs that improve water quality and regularity are universally desired, we know less about household preferences for who administers the program and who is eligible to enroll. We design a choice experiment survey to study preferences for attributes of a PHS program in Xalapa and Coatapec, Mexico. Expectedly, both cities' residents are willing to pay more to support a PHS program that improves water quality and water quantity regulation. Trust in the municipal government in the case of Xalapa and watershed awareness in Coatepec increase the likelihood of selecting the proposed alternative PHS programs. Households in both cities are willing to pay a premium if an NGO is involved in managing the program. While residents of Xalapa prefer keeping the PHS program land eligibility restricted to forests, the residents of Coatepec are willing to pay significantly more for a program that expands land eligibility to include shade-grown coffee. Overall, the WTP for a PHS program is estimated to be 16% of the current average monthly water bill for Xalapa households and 70% of the current water bill for Coatepec households. Our findings suggest that downstream water users can serve as a viable option for financing a PHS program to conserve forestland upstream. Attention needs to be paid to differences in WTP magnitudes and the population characteristics that affect differences in WTP across cities, such as trust in the government and watershed awareness.",
keywords = "Forests, Mexico, Payments for hydrological services, Program design, Shade-grown coffee, Willingness to pay",
author = "Ian McGinnis and Atallah, {Shady S.} and Huang, {Ju Chin}",
note = "We acknowledge funding from the University of New Hampshire's Collaborative Research Excellence Initiative. In this paper, we focus on the conservation of forestland to provide hydrological services (HS) in the context of Veracruz, Mexico. A significant amount of deforestation occurred in Mexico between 1993 and 2000, where approximately 8.2 million ha of forests were converted to intensive land uses such as agricultural fields and pastures (Vel{\'a}squez et al., 2002). Upstream landowners bear the costs of conserving HS, and the benefits go to the downstream water users (Bishop et al., 2002). Consistently, the Mexican federal government introduced PHS programs in 2001 that would be financed by water user fees, which provide a natural link between the providers and the consumers of the HS. Specifically, landowners are providers of HS because the conservation of forested land helps to regulate and filter water that reaches the downstream water users, the HS consumers (Carvalho-Santos et al., 2014). The program was finally established in 2003, with the Mexican Congress earmarking 2.5% of water fees to be used to fund the program, implemented by the National Forestry Commission (CONAFOR). After one year, in 2004, the budget was increased from $30 million to $100 million (Cameron, 2016).Program design is crucial to the long-term support and efficiency of any PES program, and place-based tailoring is especially important in the case of hydrological services (Lurie et al., 2013). Trust in the implementing entity is especially important in a context like Mexico where there is evidence of significant distrust of the government (Meschoulam et al., 2015). Identifying the type of land eligible for payments in a locally based PHS program calls for considering localized culture and sense of place in program design (Lurie et al., 2013). One land use that can affect the provision of HS is shade-grown coffee. A land-use transition from shade-grown to intensive sun-grown coffee systems may increase the risk of groundwater contamination by chemicals (Cannavo et al., 2011) and have other negative hydrological consequences for surrounding watersheds (Zimmermann et al., 2006). Expanding PHS land eligibility from forests only to including shade-grown coffee may slow down this transition and increase interest in and support of a PHS program. The addition of shade-grown coffee land to the eligible land of a PHS program can be an attribute of interest to respondents, especially given the significance of coffee to Mexico's culture and economy. But this might be different for a big city like Xalapa vs. a smaller city with a coffee culture like Coatepec. On the other hand, because shade-grown coffee can provide less HS than forests, households might not support expanding the land eligibility to this land use category.",
year = "2021",
month = dec,
day = "15",
doi = "10.1016/j.jenvman.2021.113763",
language = "English (US)",
volume = "300",
journal = "Journal of Environmental Management",
issn = "0301-4797",
publisher = "Academic Press",
}