FEEM working papers "Note di lavoro" series
2012 .063

Relaxing Constraints as a Conservation Policy


Authors: Ben Groom, Charles Palmer
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Keywords: Payments for Environmental Services (PES), Market Constraints, Cost-Effectiveness, Efficiency
JEL n.: H21, Q28

Abstract

Eco-entrepreneurs in developing countries are often subject to market or institutional constraints, e.g. via credit rationing or missing markets. Conservation interventions which relax constraints may be both cost-effective and poverty reducing. A simulation using data from an intervention in Madagascar to relax the technological constraints of forest honey production investigates this possibility. Cost-effectively achieving dual environment-development goals is shown to depend on the severity of constraints, relative prices and, importantly, the nature of technology. Success is more likely for technologies exhibiting close to constant returns to scale or high input complementarity. Forest honey does not meet these requirements, whereas sustainable forest management may well do. Ultimately, where market or institutional constraints are present, knowledge of the recipient technology is required for more informed, efficient and perhaps, more politically-acceptable conservation policy.

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