Payment for Ecosystem Services in the Bolivian Subandean Humid Forest

Abstract

In this paper we show that following good practices for the economic valuation of environmental services has strong implications in the evaluation and design of a Payment for Environmental Services (PES) program. In our valuation exercise we use a numerical certainty scale to correct for the “hypothetical bias” associated to stated preference methods reducing significantly the estimated WTP. According to our results, by adjusting the mean WTP the values are reduced by 70%. We need to estimate correctly people´s willingness to pay for the environmental service in order to evaluate whether or not the money collected from the consumers will be enough to compensate the opportunity cost of the providers and other cost generated by the institutional arrangements needed to implement the PES program. Values that are more conservative could assure greater political and social support for the program, as more people would want to participate in it but at the same time, it may suggest that the project is not socially worthy