Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz...
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![Page 1: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/1.jpg)
Mexico’s Program for the Payment of Hydrological
Environmental Services of Forests
Carlos Muñoz PiñaInstituto Nacional de Ecología
![Page 2: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/2.jpg)
60 million hectares of temperate and tropical forests in Mexico
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A country experiencing very fast deforestation
- 3
-2
-1
0
1
2
3
4
5
An
nu
al r
ate
of
chan
ge
%
TemperateForests
TropicalForests
Shrubs
Vegetación
hidrófila
Otros tipos de vegetación Natural
Grassland
Induced
pasture
Crops
Land use change in Mexico 1993-2000
-
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Overexploited Aquifers
![Page 5: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/5.jpg)
Market failures
Less silting and better water quality in watershed and recharge areas in aquifers.
Biodiversity Conservation
Carbon sequestration
The market does not pay for the environmental services of forests:
![Page 6: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/6.jpg)
3 Types of Hydrological Services
• Aquifer Recharge
• Improved surface water quality, less suspended particles and lower costs.
• Reduce frequency and damage from flooding in short steep watersheds
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Deforestation and market forces
Market signals (inputs and output prices)
Short term horizon induced by poverty
Costly cooperation in common property forestry
Decisions to change land use respond to:
![Page 8: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/8.jpg)
Localities with high or very high marginality
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60 million hectares of temperate and tropical forests in Mexico
![Page 10: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/10.jpg)
Land use changesControl vs. Incentives
• In Mexico, government’s control of land use changes is costly, not effective and potentially poverty increasing.
• So, necessarily conservation = profitable forests
for communal owners taking land use decisions
Otherwise: regulatory taking on the poor
![Page 11: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/11.jpg)
A public policy nicheForests with (potential) commercial use
PRODEFOR, PROCYMAF,
Cadenas Productivas
Plantations PRODEPLAN
Degraded Forests PRONARE
Not degraded, not commercial forests, important for watersheds and aquifers
PSAH
![Page 12: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/12.jpg)
Program’s Objective• Stop the deforestation that
threatens those forests critical for watershed-related environmental services in Mexico
ByPaying land owners to preserve
forest land and avoid its transformation for other uses, such as: agriculture and cattle raising.
![Page 13: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/13.jpg)
Eligibility Areas for PSAH
Forests owned by the poor
or
Forests important for water
With potential future clients
Providing other environmental
services?
or
Overexploited acquifers Deep poverty
municipalities
H related natural disasters
High water scarcity zones
or
or
Cities > 5K
Priority Mountains
Natural protected areas
or
or
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Linking providers with those who benefit
• Federal Fees Law reformed to introduce an earmarking of a portion of the water fee.
Negotiations• Initial proposal 2.5%• Finance Ministry & National Water
Commission want to exclude municipalities from payment, so fix amount to ~US$20 million.
![Page 15: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/15.jpg)
How much?
Two ways of approaching the problem:
1. Value of the service: What would
society loose if the forests were not there?
2. Opportunity Cost: What landowners would sacrifice if they kept the forest.
• Between those 2 values is the relevant space of the transaction.
![Page 16: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/16.jpg)
OPORTUNITY COSTS
-2000 -1000 0 1000 2000 3000 4000 5000 6000
.00005
.0001
.00015
.0002
.00025
.0003
.00035
.0004
.00045
Densidad
FrijolRENTAF N(s=1.22e+003)
-1000 0 1000 2000 3000 4000 5000 6000
.0001
.0002
.0003
.0004
.0005
.0006
.0007
.0008Densidad
BovinosRENTABOV N(s=858)
-100 0 100 200 300 400 500 600 700 800 900
.001
.002
.003
.004
.005
.006
.007
Densidad
Ovinos y Caprinos
RENTAOTR N(s=175)
Cattle
Corn
Beans
Sheep & Goats
Source: Luis Jaramillo (2003) www.ine.gob.mx
-1000 -750 -500 -250 0 250 500 750 1000 1250
.00025
.0005
.00075
.001
.00125
.0015
Densidad
MaízRENTA N(s=282)
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Differentiated payment
• A political economy mix, recommendation based on opp cost, combined with value of service & forestry lobby:
1. Cloudforests: $400 pesos (~US$37) per hectare per year
2. Rest of temperate and tropical forests: $300 pesos (~US$28) per hectare per year
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Forest area incorporated into PSAH
Year in which forest is signed into the program … 2003 2004 2005 2006 2007 total
Surface incorporated into
the program (thousand hectares)
126.8 184.2 169.1 118.0 545.6 1,143.7
Forest owners participating
(individuals + collectives)
272 352 257 193 816 1,890
Total payment to be made over 5 years
(million US$)
3.5 5.2 4.7 17.2 84.2 114.8
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PSAH 2003-2008: >1.2 million hectares
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Durango: a watershed supplying cities and irrigation districts
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Challenges for PES
• Unexpected success: Three times as many applications as funds. (Excess demand)
• Possibility of generating greater value to customers.
• Who received the payments?• Lets look at the actual
targeting…
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Targetting:
• By value of environmental service• By level of poverty• By risk of deforestation
Important: voluntary program implies
self-selection.
![Page 23: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/23.jpg)
Overexploited Aquifers
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Type of Aquifer
Country (surface)
%
Population using it
%
Eligibility CONAFOR
PSAH 2003
%
PSAH 2004
%
PSAH 2005
%
PSAH 2006
%
PSAH 2007
%
Extremely Overexploited
(+50% a +800%)0.1 29 7 0 0 7 13 6
ModeratelyOverexploited(+5% a +50%)
19 14 18 13 10 20 34 12Expansion margin or
Equilibrium(less than +5%)
68 57 73 79 85 72 51 80
No information 13 0.1 2 8 5 2 2 2TOTAL 100 100 100 100 100 100 100 100
Overexploited aquifers
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Type of Aquifer
Country (surface)
%
Population using it
%
Eligibility CONAFOR
PSAH 2003
%
PSAH 2004
%
PSAH 2005
%
PSAH 2006
%
PSAH 2007
%
Extremely Overexploited
(+50% a +800%)0.1 29 7 0 0 7 13 6
ModeratelyOverexploited(+5% a +50%)
19 14 18 13 10 20 34 12Expansion margin or
Equilibrium(less than +5%)
68 57 73 79 85 72 51 80
No information 13 0.1 2 8 5 2 2 2TOTAL 100 100 100 100 100 100 100 100
Overexploited aquifers
![Page 26: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/26.jpg)
Targeting the poor
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Poverty and PSAH
Marginality
Forest communities
national level
Elegibility CONAFOR
PSAH 2003
PSAH 2004
PSAH 2005
Hectares (%)
Hectares (%)
Hectares (%)
Hectares (%)
Hectares (%)
Very high 69 35 25 22 26
High 17 43 47 61 53
Medium 9 6 18 8 14
Low 3 14 8 6 6
Very Low 2 1 2 3 1Total 100 100 100 100 100
79% - 83%
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Targetting poverty
![Page 29: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/29.jpg)
Targetting poverty
![Page 30: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/30.jpg)
SEEKING EFFICIENCY
• Objetive: Maximize protection of environmental services through avoiding deforestation
• Efficiency: Maximize value to fee-payers through avoiding maximum hectares deforested at minimum cost, within budget constraint.
![Page 31: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/31.jpg)
• Main driving force: land use changes.
• More profitable agricultural and cattle ranching activities.
• Short term horizon caused by poverty (Guevara:2002).
• Specific patterns identified through econometrics: transport cost, slope, potential ag yields.
How to measure real risk of deforestation?
![Page 32: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/32.jpg)
“All models are wrong, but some are useful.”
(George Box, quoted by Kennedy 1992: 73; quoted by Kaimowitz & Angelsen: 1998; and here).
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Una rejilla para puntos de muestreo
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20%
40%
60%
80%
100%
15
75
135
195
255
315
375
435
495
555
615
675+
Secundario sin cambio Secundario deforestado
Primario conservado Secundario regenerado Primario degradado
Primario deforestado
0%
Cambios de uso de suelo y distancia al poblado más cercano
MINUTOS
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ANÁLISIS ECONOMÉTRICO
VariableProbit
Deforestación/degradación vs no cambio
Probit OrdenadoDeforestación, degradación, no cambio
Pendiente (%) -0.005745 ** -0.003574 **
Altitud (msn) .0000415 -.00000356
Distancia al pueblo (min) -0.0035625 ** -0.002861 **
Distancia a la ciudad (min) -0.0018948 ** -0.001137 **
Rendimiento de maíz (txHa) -0.0126468 0.0690093 **
Índice de marginación 95 0.0787564 ** 0.0647605 **
Dentro de ANP -0.618584 ** -0.628249 **
Pino y Pino-Encino 0.2120812 ** 0.8128571 **
Selva alta 0.4517746 ** 0.814395 **
Selva baja 0.2789231 ** 0.6340389 **
* Significativo a niveles mayores a 90%; ** Significativo a niveles mayores a 99%,
18k obs
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Results for 2000 forests in Oaxaca
![Page 37: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/37.jpg)
Targetting: Risk of Deforestation
Risk of deforestation
(quintiles)
Forests at
National Level
Elegible area
CONAFOR
PSAH 2003
PSAH 2004
PSAH 2005
PSAH 2006
PSAH 2007
% % % % % % %
Very high 20 12 4 11 7 6 14
High 20 6 7 17 13 10 20
Medium 20 18 17 20 21 16 18
Low 20 25 30 30 27 25 22
Very Low 20 39 42 22 33 43 27
Total 100 100 100 100 100 100 100
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Targetting: Risk of Deforestation
Risk of deforestation
(quintiles)
Forests at
National Level
Elegible area
CONAFOR
PSAH 2003
PSAH 2004
PSAH 2005
PSAH 2006
PSAH 2007
% % % % % % %
Very high 20 12 4 11 7 6 14
High 20 6 7 17 13 10 20
Medium 20 18 17 20 21 16 18
Low 20 25 30 30 27 25 22
Very Low 20 39 42 22 33 43 27
Total 100 100 100 100 100 100 100
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2008: Incorporating Watershed Targeting
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Topographical Zones and Watersheds
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Deforestation Risk and Topographical Zones(millions of hectares of forests)
Topographical Zones
Deforestation Risk
Very Low Low Medium
High Very High
Upper Watershed 7.8 7.2 6.6 4.7 3.2
Middle Watershed 3.9 4.6 5.0 6.2 6.9
Lower Watershed 0.4 4.5 0.6 1.4 1.8
A significant amount of key watershed areashas a high and very high deforestation risk
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Modifying rules to incorporate new criteria for selection: location within a watershed and
relative water scarcity of the watershed
Topographical Zones
Average Water Scarcity in the Watershed
High scarcity
Medium scarcity
No water scarcity
problemsUpper
Watershed 5 points 5 points 4 points
Middle Watershed 4 points 3 points 2 points
Lower Watershed 3 points 2 points 1 point
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PSAH 2003 (%) PSAH 2004 (%) PSAH 2005 (%) PSAH 2006 (%) PSAH 2007 (%)
Minor to 4 14.7484347010998 40.015400105752 36.8760566874358 28.1897787064743 18.6048253036627
Between 4 y 7 53.8470741705067 40.0599985641625 41.7785742164123 59.9861113426273 44.2612487846348
Major to 7 31.4044911283935 19.9246013300853 21.3453690961518 11.8241099508984 37.1339259117026
5%
15%
25%
35%
45%
55%
65%
75%
85%
95%
Distribution of PSAH payments by water scarcity in the watershed
%
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Looking ahead
• We need tests to compare areas with payment and areas without payment, to see if there is a difference (control by deforestation risk, obviously )
• The problem of the “sixth year”. Need to see what they do after the contract ends:
– They can re-apply but no certainty that they are chosen
– They had money and time to build a sustainable forestry operation or move into other markets for environmental services. It is an empirical question.
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Modifying behaviour, really (1)
2003-2006% de predios donde
se observó deforestación
Tasa de deforestación anual
(donde hubo def)
Predios sin PSAH 96% 6.6%
Predios con PSAH 97% 4.1%
Polígono pagado 66% 1.9%
Polígono no pagado 97% 5.8%
• Combinación de imágenes Spot y Landsat. Método que sobreestima la deforestación, por lo tanto tomar en cuenta sólo el valor relativo.
• Muestra aleatoria, 160 predios.
• La diferencia está
entre el polígono pagado y las zonas (polígono o predio) no pagado.
![Page 47: Mexico’s Program for the Payment of Hydrological Environmental Services of Forests Carlos Muñoz Piña Instituto Nacional de Ecología.](https://reader036.fdocuments.us/reader036/viewer/2022062322/5665b4951a28abb57c92614d/html5/thumbnails/47.jpg)
Modifying behaviour, really (2)
2004-2007% de predios donde
se observó deforestación
Tasa de deforestación anual
(donde hubo def)
Predios sin PSAH 37% 0.3%
Predios con PSAH 28% 0.4%
Polígono pagado 9% 0.1%
Polígono no pagado 20% 0.4%
• Imágenes Spot y Landsat. Umbral alto, método que subestima la deforestación, por lo tanto tomar en cuenta sólo el valor relativo.
• Muestra aleatoria, 115 predios.
• La diferencia está
entre el polígono pagado y las zonas (polígono o predio) no pagado.
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Mexico’s Program for the Payment of Hydrological
Environmental Services of Forests
Carlos Muñoz Piña [email protected]