Valuing the Environment in Developing Countries
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Valuing the Environment in Developing Countries

Case Studies

Edited by David Pearce, Corin Pearce and Charles Palmer

In this book, the first of two volumes, the authors provide detailed case studies of valuation techniques that have been used in developing countries. They demonstrate that valuation works and that it can yield significant insights into policy-relevant issues regarding conservation and economic development. The authors address a whole range of environmental issues under the broad themes of water and air quality, biological diversity and forest functions. The economic approaches covered include contingent valuation, hedonic property prices, travel cost methodologies and benefits transfer.
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Chapter 14: Can carbon trading reduce de-forestation by slash-and-burn-farmers? Evidence from the Peruvian Amazon

Susana Mourato and Joyotee Smith

Extract

14. Can carbon trading reduce deforestation by slash-and-burn farmers? Evidence from the Peruvian Amazon Susana Mourato and Joyotee Smith 1 INTRODUCTION Slash-and-burn agriculture by small-scale farmers is estimated to account for about one third of the deforestation in tropical America. In a slash-and-burn system, farmers typically clear the land for agriculture and plant crops during one or two years, after which the land is left fallow for varying periods, while another part of the farm is cleared for agriculture. As a result, within a few decades of slash-and-burn colonists moving into an area, only small areas of primary forest are left in the farm (Fujisaka, 1996; Smith et al., 1999). In addition, yields decline over time because, typically, fallow periods do not tend to be long enough to permit full recuperation of crop productivity (Theile, 1993). Various factors have led to increased migration into forested areas and to deforestation. These include construction of penetration roads, limited employment opportunities, land degradation and perverse incentives for speculative land acquisition and cattle ranching (Smith et al., 1998). Both economic and institutional factors led migrants to practise slash-and-burn agriculture rather than adopt less environmentally damaging land use alternatives such as agroforestry (Current et al., 1985). Forests provide a variety of environmental benefits: global benefits include carbon storage and biodiversity protection, while possible local and regional benefits comprise a number of ecological functions such as watershed protection, climate stability and soil protection. However, market failure prevents farmers from taking these local, regional...

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