The cost-effectiveness of conservation payments

摘要

International donors invest billions of dollars to conserve ecosystems in low income nations. The most common investments aim to encourage commercial activities, such as ecotourism, that indirectly generate ecosystem protection as a joint product. We demonstrate that paying for ecosystem protection directly can be far more cost-effective. Although direct payment initiatives have imposing institutional requirements, we argue that all conservation initiatives face similar challenges. Thus conservation practitioners would be well advised to implement the first-best direct payment approach, rather than a second best policy option. An empirical example from the eastern rain forests of Madagascar from 1991-95 illustrates the spectacular cost savings that can be realized by direct payment initiatives.