RUI: Influence of Economic Incentives on Common Property Forest Management: Rural Decision Making in the Context of REDD+

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Payment for Ecosystem Services (PES), a voluntary transaction in which an individual receives payment for provision of an environmental service (e.g. forest for watershed protection), has emerged as a prominent international policy tool to mitigate climate change by controlling deforestation in developing countries.It remains uncertain, however, how effective these policies are in encouraging rural people to voluntarily participate, and ultimately change, their resource use behaviors. This study examines the impacts of an Ecuadorian payment for forest conservation program implemented on common-property forest lands. The study uses institutional analysis, quantitative modeling and qualitative methods to empirically test if and how the PES system of payments and contracts impacts rural and indigenous communities' decision to (1) participate in forest conservation agreements, (2) change their forest-use rules, and ultimately, (3) change individual forest use behaviors and the resultant conservation outcomes. Data are gathered via questionnaire, focus groups, and forest mensuration techniques in communities that decided to participate in the payment program and those communities that chose not to. The PES forest conservation program in Ecuador serves as a policy experiment to better understand how the broader PES model of contracts and payments corresponds to the decision-making models of rural resource users, specifically those that share common-property rights to their lands. If PES programs do not align with participant decision-making priorities, we may waste millions of dollars promoting a policy that fails to support local livelihoods or conserve the world's forests. By combining quantitative and qualitative methods, this study explores the power of monetary incentives as compared to other non-monetary factors in rural land-use decisions. The results provide valuable information to policy makers and practitioners regarding the use of incentives for forest conservation and suggestions for improving the design of PES programs in developing countries.