efd stories 2015-2016

Environment for Development Initiative Stories of economic research applied

around the world.

STORIES2015/2016

1

Africa

EthIopIA Sustainable energy transitions to support the Climate-Resilient Green Economy Strategy. page 4

KEnyA Climate change is affecting food security. page 6

South AfRICA

taking ecosystem services to the policy table. page 8

tAnzAnIAStriking a balance between revenue generation and conservation in national parks. page 10

Asia

ChInABioenergy from crop residue can reduce coal consumption and greenhouse gas emissions. page 12

Latin America

CoStA RICA Conservation policies are effective in reducing deforestation and poverty. page 14 ChILE Bringing climate change to policy makers and communities. page 16

produced by the EfD Initiative

project management: Karin Jonson

texts: Dawit Woubishet (Ethiopia), Richard Mulwa

(Kenya), Leonie Joubert (South Africa), Salvatory

Macha (Tanzania), Yibo Wang (China), Eugenia León

(Central America), Felipe Vasquez Lavín (Chile)

Editing: Cyndi Berck, IAES

proofreading: Po-Ts’an Goh

Graphic Design: Anders Wennerström, Spiro

Kommunikation AB

Cover photo: NASA and European Space Agency

(ESA) nighttime photograph showing what man-made

light looks like from the International Space Station.

photo credits: Dawit Woubishet: page 5. Daniela

Linares and Alessandra Baltodano: pages 7, 11,

19. Karin Jonson: page 9 (top images). Ecoprint,

Shutterstock: page 9 (bottom). Edwin Muchapondwa:

page 10 (top). Cesar Ogasawara: page 13 (top). Istock:

page 13 (bottom). Daniela Linares: page 14. Laura

Villalobos: page 15 (bottom). Felipe Vásquez: page 17.

EfD Secretariat:

Department of Economics

School of Business, Economics and Law

University of Gothenburg

www.efdinitiative.org

[email protected]

facebook.com/EfDinitiative@EfD_initiative flickr: EfD Initiative

2

the Environment for Development Initiative (EfD) focuses on the decisions that people make about climate change and natural resources. We believe that natural resources and the environment are the basis for sustainable global development.

to achieve this, resources need to be managed in an efficient and equitable way with the support of high-quality research.

EfD is our network for cross-country research collaborations, research-policy interaction and academic training. We apply evidence-based analytical tools to design policies that effectively manage scarce resources. the gap between research and policy is bridged through maintaining a dialogue with local communities and policy makers. We want our research findings to have a real impact on poverty reduction by supporting truly sustainable development.

In September 2015, the Sustainable Development Goals (SDGs), officially known as ‘transforming our world: the 2030 Agenda for Sustainable Development’, were adopted at the un Sustainable Development Summit. these 17 goals are an intergovernmental set of aspirational goals with 169 targets. When presenting our stories, we relate all of them to one or more of the SDGs. We hope you enjoy our stories from EfD centers across the developing world.

united nation’s Sustainable Development Goals (SDGs), officially known as transforming our world: the 2030 Agenda for Sustainable Development.

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EfD IN EthIopIa

Sustainable energy transitions to support Ethiopia’s Climate-Resilient Green Economy Strategy

Ethiopia aims to build a green economy and to follow a growth path that fosters sustainable development. through the development of its Climate-Resilient Green Economy (CRGE) strategy, which is based on carbon-neutral growth, it envisions attaining middle-income status by 2025. Improving the productivity of the agricultural sector, protecting forests, expanding the coverage of electric power from renewable sources of energy and transitioning into modern and energy-efficient technologies are the main pillars of Ethiopia’s CRGE strategy.

Supporting the CRGE strategy through four programs

The Environment and Climate Research Center (ECRC),

hosted by the Ethiopian Development Research Insti-

tute, in partnership with EfD and the Global Green

Growth Institute, is one of the partners

supporting Ethiopia’s CRGE strategy

through research and devel-

opment. The center

aims to launch

four long-

term

programs: (i) Policy Research and Impact Evaluation (PRIE), (ii)

Policy interaction and communication, (iii) Data management and

knowledge repository, and (iv) Capacity building. The PRIE program,

around which the other three programs will be built, focuses on the

thematic areas of energy, industry, agriculture, forestry, water and

urbanization.

Focus on sustainable energy transition

The energy sector is central to the CRGE strategy. Low-carbon

energy can support green growth locally and has the potential to

develop alternative energy sources regionally, with the goals of

securing sources of income, contributing to development, and ulti-

mately decoupling the country’s economy from the fluctuating prices

and unsustainable nature of an oil-based economy. Ethiopia aspires

to become a renewable energy hub in East Africa by ensuring ac-

cess to affordable, clean and modern energy for all citizens by 2025.

Furthermore, the two phases of the Growth and Transformation Plan

have emphasized the energy sector, in an effort to meet energy de-

mand in the country by providing sufficient and reliable power, with

the further aims of exporting power to neighboring countries and

developing alternative sources of renewable energy.

At present, 85% of Ethiopian households are rural. Almost all of

these rural households use biomass fuel for cooking and only 5%

have access to electricity. This puts

the country at the bottom of the “en-

ergy ladder.” The “energy transition”

to clean fuels is at its early stage,

and the traditional fuel sources are

very carbon intensive. To address

Addis Ababa Light Rail opened in 2015. Photo: Francisco Anzola

4

these challenges, the two pillars of the CRGE strategy – expand-

ing electricity generation and increasing the use of energy-efficient

technologies – focus on energy transition and aim for massive

electrification in an effort to expand coverage to all regions by 2020.

The energy transition program has electric and non-electric energy

components, with the electric energy component further classified

as on-grid electric and off-grid energy programs. The non-electric

programs mainly focus on energy for cooking and aim at promoting

clean, energy-efficient cook stoves and expansion of biogas produc-

tion for households.

Workshop to identify knowledge gaps

In June 2015, ECRC organized a three-day international workshop

on a Sustainable Energy Transitions Initiative (SETI) to identify key

knowledge gaps and fundamental research questions on tradeoffs,

drivers and impacts of energy transitions. A series of discussions

have been held with relevant stakeholders (practitioners and re-

searchers) in the energy sector. On top of this, the PRIE team for en-

ergy is busy reviewing the economic literature and policy documents

to identify what is needed to implement sustainable energy transition

in Ethiopia. Demand for electrification and its impact, demand and

impact related to improved cook stoves, energy transition and ef-

fects of biofuel use are research themes identified under the PRIE

program that are crucial for the energy sector.

The energy team at ECRC informs policy makers in two ways. The

first approach is to generate evidence on the impacts of interventions

in electric energy and non-electric energy programs. The second line

is to study different ways of providing electricity and energy-efficient

technologies and to identify the most cost-effective approaches.

Four energy sub themes

The research theme related to demand for electrification and its

impact focuses on the adoption of electricity in grid-covered areas,

estimating demand and incentives to create a sustainable market for

solar technologies, as well as the socioeconomic impacts of different

electrification technologies (grid extension vs. solar home systems)

and economy-wide impacts of electrification programs on growth

and greenhouse gas emissions. The second theme emphasizes the

demand for improved cook stoves and the impact of this technol-

ogy. Specifically, ECRC addresses how social networks among rural

people affect technology adoption, how technologies spread to new

users, and the role of local forest institutions in the adoption of im-

proved biomass stoves and alternative fuel sources. The third theme

focuses on energy transition. It emphasizes households’ transition

from traditional fuel sources to modern and energy-efficient sources.

Specifically, we address the role of incentives in electric cook stove

adoption and biomass fuel consumption, the effects of sudden or

extreme energy price changes on energy demand, and households’

responsiveness to energy price inflation. The effects of biofuel use,

such as the impacts of biodiesel production on food security land

use, are addressed in the last theme. The ultimate objective of the

energy program at ECRC is to develop a research and strategic plan

for the next five years on sustainable energy transition in Ethiopia in

line with other cross-cutting issues of the PRIE program to support

the country’s CRGE strategy.

Researchers involved

Alemu Mekonnen, Sied Hassen, Abebe Damte, Amare Fentie, Yonas Alem, Gunnar

Köhlin, Subhrendu Pattanayak, Tensay Hadush and Zenebe Gebreegziabher.

References

“ECRC presented five-year research plan in high-level workshop.” http://www.

efdinitiative.org/ethiopia/news/l/ecrc-presented-five-year-research-plan-high-level-

workshop/4514

Sustainable Develpment Goals in focus

Images taken during a Controlled Cooking Test (CCT) at Awi Zone, Ethiopia. Left: An open fire stove. Middle: A baking stove. Right: An improved “injera” baking stove. (Injera is a yeast-risen flatbread made from teff flour).

5

EfD IN KENya

Climate change is affecting food security

A woman hoeing a vegetable garden in rural Kenya near Nairobi.

A recent study in Kenya shows that climate change and variability will increase food insecurity and that different food crops will respond differently to climate change variables. the study also highlights the different factors influencing food insecurity in a changing climate. this is important information for farmers as well as the government.

Climate change and climate variability affect weather patterns and

cause changes in historical patterns of seasonal temperature and

rain, on which farmers have long relied in making crop-planting

decisions. This is exerting pressures on agricultural systems and

threatening to significantly increase the number of people at risk

of food insecurity. This is especially true in regions where there

is over-reliance on rain-fed agriculture, high levels of poverty, low

levels of education, inadequate access to financial capital and poor

infrastructure.

More information about climate change impact is needed

In Kenya, the problem is further exacerbated by the fact that 80%

of total land cover is arid and semi-arid. Climate change is causing

harvest failure, deteriorating pasture conditions, decreased water

availability and livestock losses in both farming and pastoral com-

munities, especially in these regions. Therefore, information on how

different stakeholders can help manage the adverse impacts of cli-

mate change and reduce the threat of food insecurity is important in

tackling the climate change challenge. It is against this background

Woman farmer at the Nyando Climate Smart Villages, Kisumu, Nyanza, Kenya. Photo: K. Trautmann

6

that a research team led by the EfD Kenya Director, Prof Jane

Kabubo-Mariara, sought to address the link between climate change

and food insecurity in Kenya. This research was carried out on farm-

level data from the same households over a decade on yields of four

major crops (maize, beans, sorghum and millet), climate variables

(precipitation, temperature, runoff, and total cloud cover), population,

soil and agro-ecological zones data.

Food security and the climate change debate

This is not the first study to address climate change in Kenya,

but previous studies have concentrated on the impact of climate

change on crop and livestock productivity, and on adaptation to

climate change. However, the link between climate change and food

security in Kenya had not been explored. What Kabubo-Mariara and

her co-author did was to introduce an important dimension of food

security in the climate change and variability debate.

Their results have implications for all stakeholders, from farming

households to the government. First, they are important in informing

farming households, either directly or through their representatives –

community-based or non-governmental organizations, etc. – about

different technologies they can adopt in order to adapt to a changing

climate. These potentially include drought-resistant crops and live-

stock. At the government level, the results can be used to determine

the exact variables to be included in government strategies and

action plans to combat climate change and variability. These include

government-supported adaptation technologies, continuous climate

change monitoring, intensified early warning systems and dissemi-

nation of relevant information to farmers in order to ensure that they

adopt the appropriate adaption strategies.

Policy impact and the UN Sustainable Development Goals

The impact on policy from this research will be felt in both the short

and long run. This is because the research can assist policy makers

in drawing up and strengthening policies on adaptation to climate

change. This research can also help shape decisions that benefit

environmental development through interaction between academia

and policy makers. This study further enhances knowledge on ways

to improve food security, which is one of the main strategies for

poverty alleviation and sustainable development.

Further, the outcomes of this research support the second and

thirteenth UN Sustainable Development Goals, whose aims include

ending hunger and achieving food security and improved nutrition,

while promoting sustainable development and taking urgent action

to combat climate change and its impact.


Jane Kabubo-Mariara, Millicent Kabara

References

Kabubo-Mariara, J. and M. Kabara. 2015. “Climate Change and Food Security in

Kenya.” EfD Discussion Paper 15-05.


Jane Kabubo-Mariara, Director, EfD Kenya.

7

EfD IN South afrIca

taking ecosystem services research to the policy table

It’s late on a hot December afternoon, and the discussion turns to whether or not game farmers in South Africa should be considered part of the conservation sector, or treated as farmers engaged in just another agricultural practice.

This conversation takes place among a group of about 12 people,

in a meeting room at the South African National Biodiversity Institute

(SANBI) offices in Cape Town, and the question matters for two

reasons.

The first is because the answer to that question determines what

national departments, and the associated regulations, will oversee

these ranchers’ practices. The second is because of the people in

the room who are asking the question.

Environmental Economics Policy Research Unit (EPRU) Direc-

tor, Dr Jane Turpie and EfD Senior Research Fellow Prof Edwin

Muchapondwa are leading the discussion with hand-picked rep-

resentatives from the national Department of Environmental Affairs

(DEA) and SANBI, the state-appointed body managing the country’s

biodiversity.

EPRU’s mandate is to do research relating to the economics of

environmental and natural resource management, which can inform

policy making in this country and across the region. The research-

ers, based at the University of Cape Town’s School of Economics,

face the twin challenges of marrying their research with the needs of

policy makers and getting evidence-based findings to them once the

research is done.

This workshop is the kind of face-to-face event that Turpie and the

EPRU team hope will stimulate a rolling conversation between this

EfD South Africa center and these two government agencies, which

are tasked with deciding how to manage the country’s environmen-

tal and natural resources.

Several key areas emerge during the day’s discussions: important

questions about the government’s ongoing efforts to understand the

impact of alien invasive species, and attempts to clear them; how to

handle the growing demand for medicinal plants harvested from the

wild by traditional healers; whether there’s a gap between govern-

ment environmental policies and their implementation; and more.

Ecosystem services: a key EPRU focus

EPRU’s work is geared toward influencing South African policy in

three key areas: climate change; the value of nature conservation

parks, biodiversity and ecosystem services; and marine fisheries.

This year saw the team strengthen its research in the area of ecosys-

tem services in several ways: by launching related research projects,

writing up the findings in various papers and formats, and presenting

their results at conferences and in workshops.

Turpie says their job is to produce policy-relevant research that is

Kogelberg Mountains and South Atlantic Ocean. Photo: Christopher Griner

8

geared toward solving problems faced on the ground, rather than

just offering theory. In terms of the focus on ecosystem services, the

team still has plenty of work ahead of it, but they have made impor-

tant strides this year, in terms of gauging the demand for research

linked to the economics of ecosystem services, and where they can

use this to advise key decision makers.

Research geared toward assisting policy makers across southern

Africa includes Dr Susan Snyman’s study of the economic benefits

of ecotourism for rural communities, which looks at high-end lodges

across six southern African countries. Meanwhile, Prof Muchapond-

wa’s analysis of the cost of entering national parks in South Africa,

Botswana and Tanzania can inform environmental departments in

all of those countries to structure their park entry fees appropriately

for local and international tourists. SANBI’s Director of Biodiversity

Policy, Ms Mandy Driver, is working with the United Nations through

EPRU to help draw up a standardized approach to environmental

accounting for the region. This work is toward Ms Driver’s doctoral

research.

Their work also zooms down to the city scale, and can be useful

for municipal managers. For instance, two studies have looked at

the value of urban green spaces in Durban, on the South African

east coast, and in Kampala, the capital of Uganda.

The economic benefits of preserving the region’s

biodiversity

EPRU researchers have shown that parks and other green belts in

Durban push up the value of surrounding properties, and that this

can be a boon for municipalities, which can then ask for higher rates

on those homes. Meanwhile, another study has shown that, if de-

graded wetlands are restored in Kampala – a city which has very few

natural recreational spaces – it could have significant economic and

recreational benefits for the people of the city. Residents currently

have to drive several hours from the capital in order to find natural

recreational spaces.

Calculating the “amenity” value of nature – in these two cities, as

well as in other areas like the Kogelberg coastline near Cape Town –

suggests that municipalities, conservationists and development plan-

ners should consider the potential of the beauty of nature as a money-

spinner because of their local tourism and recreational potential.

These are just some of the examples of how this team of environ-

mental economists is trying to highlight the economic benefits of

preserving the region’s biodiversity and healthy, functioning environ-

mental systems.

Dr Turpie concluded the December workshop addressing these

key SANBI and DEA representatives by reflecting on the importance

of EPRU informing these institutions about precisely what it is that en-

vironmental economists do, and what their methods are, in order for

them to appreciate the value of the research findings EPRU offers.


Edwin Muchapondwa, Susan Snyman, Jane Turpie, Johane Dikgang, Herbert Ntuli

References

Ntuli, H. and E. Muchapondwa. 2015. “A Bioeconomic Analysis of Community

Wildlife Conservation in Zimbabwe.” EfD Discussion Paper Series 15-28.

Snyman, S. 2014. “Partnership between a private sector ecotourism operator and

a local community in the Okavango Delta, Botswana: the case of the Okavango

Community Trust and Wilderness Safaris.” Journal of Ecotourism 13(2-3): 110-127.

Turpie, J. and J. de Wet. “Economic Value of the Kogelberg Coast, Western Cape,

South Africa.” 2015. EfD Discussion Paper 15-30.


Should farming with wildlife, like these wildebeest, be governed by South Africa’s conservation policies or agriculture?

Mandy Driver, Director of Biodiversity Policy, SANBI and Jane Turpie, Director EPRU, at UCT. Edwin Muchapondwa, EfD Senior Research Fellow, UCT.

9

EfD IN taNzaNIa

Striking a balance between revenue generation and environmental conservation

in national parks

national parks have long been the most common approach to biodiversity conservation. however, there are often tradeoffs between support for biodiversity and other social goals that rely on government revenue for primary funding and subsidies. As a result, governments in poor countries cannot afford to fully finance conservation due to budgetary limitations. this imposes pressure on park managers to find alternative financing mechanisms.

“As much as we need the revenue to finance parks main-

tenance and other government activities,

still we have the mandate to ensure that the

environment is conserved,” said Mr Gerald

Kibira, EfD Tanzania Junior Research Fellow,

during his presentation of the research findings

on an optimal park pricing study involving national

parks in Kenya (Maasai Mara), Tanzania (Serengeti)

and South Africa (Kruger). He was speaking at a

park pricing final paper workshop organized at

Kruger National Park (KNP). The workshop

involved EfD researchers from South Africa, Tanzania and Kenya.

Others were researchers, ecologists, park wardens and the man-

agement team from KNP.

Increased competition for government spending – a threat

to national parks

National parks in Africa mostly rely on fiscal transfers from the state

to fund their conservation activities. Increased demand for govern-

ment spending on other sectors has increased the competition for

funds for national parks conservation and threatens the existence of

national parks and other protected areas.

Preliminary findings in the Serengeti National Park show

that the maximum entrance fee that visitors

are willing to pay stands at USD 125, while

the current entrance fee is USD 50. Around

175,000 tourists visited Serengeti National

Park in 2012/13. Entrance fees can be used for

improving conservation and infrastructure at the

park, as well as for other public services. However,

only some visitors are willing and able to pay USD 125,

meaning the park would lose too many visitors, and revenue

would end up decreasing. According to the study, the fee

Photo taken during park pricing workshop in Kruger National Park.

10

increase that is acceptable to a large enough number of visitors is

around USD 7 and thus the park authorities could raise the entry fee

to USD 57.

“Serengeti National Park is facing the challenge of limited revenue

generation for operational costs and park maintenance,” said Mr

Godlisten Kimaro, Tourism Warden at Serengeti National Park. In

addition, there are limits to both domestic tourism and sustainable

foreign tourism due to global security concerns and financial crises.

Adjacent villages assist in protection of the wildlife

Poaching is another major challenge facing the Serengeti. With

limited resources, effective and continuous surveillance has been

difficult to implement. “The park welcomes the Wildlife Management

Areas (WMAs) arrangement with great enthusiasm,” said Mr Kimaro.

This is an arrangement in which villages own, maintain and protect

portions of the park that are adjacent to their villages. As a result,

they assist in protection of the wildlife and other biodiversity.

Timely research findings to influence park pricing in

Tanzania

Environment for Development Tanzania (EfDT) has shared their

preliminary findings with Tanzania National Parks (TANAPA) as part

of the center’s policy interaction with stakeholders and policy mak-

ers. “These are really timely research findings, given that TANAPA is

strategizing to adjust its entrance fees,” said Mr Kimaro. He added

“the main challenge is striking the balance between the objective of

income generation for park maintenance and government financing

of social services and environmental protection.”

In view of this, EfDT organized a workshop in February 2016,

in which the research findings for the optimal park pricing were

presented and discussed with the key stakeholders. “In the 2015/16

EfDT work plan, it is envisaged to conduct a key stakeholder work-

shop to disseminate research findings,” said Dr Razack Lokina, EfDT

Center Director. He added “one of the workshops is on park pricing,

in which the research findings for Maasai Mara, Kruger and Seren-

geti will be disseminated.”

The collaborative research on optimal park pricing involved data

collection by interviewing foreign tourists in the Serengeti, Maasai

Mara and Kruger National Parks. “The concern about instituting

optimal park pricing was noted and positively welcomed by all the

tourists who were interviewed,” said Dr Stephen Kirama, EfDT Re-

search Fellow and the coordinator of the field work for the Serengeti

National Park. “Our expectation is that you don’t lower the fees to

overpopulate the parks, but also you don’t inflate them so high that

you depopulate it,” noted a German visitor to the Serengeti.

EfDT is considering the findings from the park pricing research as a

major breakthrough to ensure sustainable income generation for the

Serengeti as well as for the maintenance of the Serengeti ecosystem.

Another milestone of interaction between researchers

and policy makers

“For EfDT, the optimal park pricing study is another achievement that

promotes interaction between the center and the key policy makers

in Tanzania” said Prof. Lokina, adding that, at the moment when the

5th Phase Government is strategizing on increasing government

revenue, the research findings offer a key avenue to open up yet

another source of income through tourism.

“The remaining challenge is still to boost the dwindling domestic

tourism,” said Dr Kirama, adding that it is very important for the

Ministry of Tourism and Natural Resources to widen awareness

campaigns and promote park visits in order to boost domestic

tourism. The best way is to start with special awareness campaigns

for schools, colleges and other institutions, as well as promotional

subsidized park tours during the low seasons in order to curb the

revenue gap resulting from low levels of foreign tourism during those

seasons.

While EfDT is proud of the preliminary research findings on

optimal park pricing, there is still much more to be done on related

areas, such as alternative park financing, improvement of park infra-

structure, poaching of endangered species and involvement of the

neighboring communities in protection of the natural wealth for both

income generation and intergenerational heritage.

Gerald Kibira, EfD Tanzania Junior Research Fellow.


Gerald Kibira, Stephen Kirama

References

“The structure and level of entrance fees in Serengeti National Park in Tanzania” by

Gerald Kibira (paper under review)


11

EfD IN chINa

Bioenergy from crop residue can reduce coal consumption and greenhouse gas emissions

China’s booming economy needs energy. fortunately, agricultural waste offers the potential for relatively clean energy. that’s the conclusion of EfD China’s study on the potential to turn corn, wheat and rice crop residue into bioenergy.

“China’s demand for energy has increased more than four-fold dur-

ing the past 30 years, with coal being the primary energy source,”

explained researcher Dr Xiaoguang Chen. “Over-reliance on coal has

led to China becoming the world’s largest emitter of sulfur dioxide and

greenhouse gases, with serious effects on health as well as climate.

These problems motivated my study of the potential of bioenergy.”

While biomass will not entirely replace coal in the foreseeable fu-

ture, it can significantly reduce the use of coal, Dr Chen explained. It

is possible to add biomass into the fuel mix at power plants that are

currently coal-fired, a process known as “co-firing.” This approach

could improve urban air quality while reducing carbon emissions that

affect climate change.

Rice, wheat and corn can reduce coal consumption

“If crop residues can be effectively utilized, China can significantly

reduce coal consumption and improve air quality,” continued Dr

Chen. His study looked at crop waste in some detail, at the county

level, to evaluate how much renewable energy can be produced

from cellulosic biomass. Cellulosic biomass can be derived from ag-

A cyclist wears a mask to reduce inhaling polluted urban air in Beijing. Photo: Shutterstock

12


Xiaoguang Chen

References

Chen, Xiaoguang. 2015. “Assessment of the Potential Biomass Supply from Crop

Residues in China.” EfD Discussion Paper Series 15-06

Chen, Xiaoguang. In press. “Economic Potential of Biomass Supply from Crop

Residues in China.” Applied Energy.

Jiang, D., Zhuang, D., Fu, J., Huang, Y., and Wen, K. 2012. “Bioenergy Potential

from Crop Residues in China: Availability and Distribution.” Renewable and

Sustainable Energy Review 16: 1377-82.


ricultural sources, such as crop residues and perennial grasses, as

well as forest sources, such as forest residues and woody biomass.

Crop residues mainly include corn stover (waste), wheat straw, and

rice straw. As compared to the fossil fuels that they can displace,

cellulosic biomass can offer greater potential for various environ-

mental benefits.

Farmers need incentives to collect crop residues for

bioenergy purposes

However, farmers need incentives to harvest this residue for pur-

poses of bioenergy. “Our analysis shows that China could produce

up to 250 million metric tons of crop residues annually if a biomass

price of USD 100 per metric ton made this profitable,” explained

Dr Chen. Rice straw is likely to be the main biomass type in China,

representing about 47% of total residue production, while corn sto-

ver can potentially contribute 28% and wheat straw can potentially

contribute 25%, according to his research.

A longer-term goal is to maximize bioenergy production. To create

the incentives for Chinese farmers to begin collecting crop residues

for bioenergy purposes, biomass prices of USD 40-70 per metric ton

would be required, depending on production costs of crop residues

and residue collection technology.

To encourage farmers to harvest crop residues for bioenergy

production, the Chinese government should target areas with high

yields and low costs for producing corn, wheat and rice, concluded

Dr Chen. With the estimated large amount of crop residues, China

has great potential to reduce reliance on coal and improve urban air

quality by co-firing agricultural biomass with coal at coal-fired power

plants.

Rice straw. Photo: Cesar Ogasawara

A coal-fired power plant. Photo: Istock

13

Conservation policies are effective in reducing deforestation and poverty

Costa Rica originally had a territory almost entirely covered by natural forests. By 1960, forest coverage was reduced to 60%. the high rate of deforestation in the following decades accelerated this process. In the 1980s, forest coverage was only 41%. however, in recent decades, this trend has changed. A restoration process started, with the goal of a forest cover equivalent to 52.4% of the country.

A System of Protected Areas (SPAs) started in the 1970s with the

establishment of national parks, biological reserves and other cat-

egories of protection. Now, protected areas cover about 44% of the

forest area, while the remaining 56% is private property which is also

regulated under the Forestry Act of 1996. Economists call the SPAs

a policy of “command and control,” where the government sets rules

instead of providing incentives. By contrast, Payments for Environ-

mental Services (PES) is a market instrument, and is the leading

conservation policy for private property in Costa Rica. PES started

in 1997. By 2014, 46,400 hectares, equivalent to 1% of the country,

were added to the program.

EfD researchers called upon to document impact of PES

for State of Nation program

Researchers Dr Juan Robalino and Ms Laura Villalobos of EfD

Central America (EfD-CA) were called upon as part of Costa Rica’s

State of the Nation Program to document evidence of the impact of

protected areas and payments for environmental services on forest

conservation. The State of the Nation Program is an annual report

intended to improve citizen access to information about public af-

fairs. Its slogan is “Know the Costa Rica we have and think about

the Costa Rica we want,” and it reports on national performance

and trends in sustainable human development. Its main audience

consists of policy makers, researchers and academia, but it’s also a

public access document for any interested parties.

EfD IN cENtral amErIca

Juan Robalino, EfD Central America Senior Research Fellow. Laura Villalobos, EfD Central America Research Fellow and PhD Student.

14

Which policies are more effective?

The work done this year by Dr Robalino and Ms Villalo-

bos helped identify which policies are more effective in reducing

deforestation, and under what conditions. Their research also

permits refining or modifying the design of policies to generate

greater impacts or to generate the desired impacts with lower

costs, as has been done in previous years when EfD-CA

researchers worked with the Forestry Financing Fund of

Costa Rica (FONAFIFO) on the design and improvement

of PES.

This work fits into Costa Rica’s development

model. Since 1990, conservation policies have been

founded on a system of national parks, which have

allowed Costa Rica to set up a tourism model based

on conserving the natural environment. Reducing

deforestation is part of this model. The study concluded that

the policy of conservation through protected areas was effective in

reducing deforestation on land within these areas. However, while

deforestation in adjacent private areas is also reduced by the SPAs,

this effect is very small.

Does conservation of protected areas have social costs?

The researchers also asked, “Does conservation through the

implementation of protected areas have a social cost?” These results

suggest that the effect of the expansion or creation of new protected

areas depends on the ability of communities to find alternative

sources of income. They also emphasize that the design of protected

areas can make a difference in the socioeconomic impacts. Policies

that promote tourism in protected areas will enhance the positive

effects of conservation around these areas.

“If protected areas encourage the development of complementary

tourism activities and/or increase the level of environmental aware-

ness among the nearby residents, the protective effect could spread

to surrounding areas,” Robalino and Villalobos stated.

One of the highlighted results of this study is that “there is no evidence

that poverty has increased, on average, in areas surrounding pro-

tected areas. Rather, there is an effect of

reducing poverty and increasing wages

of those who are located near access to

national parks,” stated Robalino and Villalobos

in the State of the Nation Program presentation.

The evidence so far leads to the following conclu-

sions published by Dr Robalino and Ms Villalobos in

the State of the Nation 2015 Report:

• The protected areas have managed to avoid

deforestation within their boundaries.

• Significant reductions in deforestation in areas

adjacent to national parks are observed.

• The additional conservation generated by protected areas

does not imply a social cost. There is no evidence that poverty

has increased on average in areas surrounding protected areas.

• The complementarity between tourism and national parks

generates positive socioeconomic outcomes for com-

munities. It could encourage tourism in the areas sur-

rounding the parks that are less visited.

• The protected area program design has

managed to curb deforestation.

In the early years of implementation, the PSA program had a limited

role in reducing deforestation nationwide. However, for the period

2000-2005, reductions in deforestation due to the program doubled.

In general, Robalino and Villalobos concluded that conservation

policies have helped maintain and restore forest cover and this has

not meant an increase in the poverty of local communities. However,

there is room to increase the positive impacts of these policies.


Juan Robalino and Laura Villalobos

References

State of the Nation Report, Costa Rica, 2015


Carrillo National Park in Costa Rica.

15

Bringing climate change to policy makers and communities

the economy of the Vergara River Basin in Chile is highly vulnerable to changes in water availability. the most vulnerable groups are poor indigenous populations and small farmers. Substantial reallocation of water between farmers and households is needed, and is made possible with the Vergara hydroeconomic Model. this project has created a bridge between scientific research and policy makers who need this information to design and evaluate adaptation strategies.

Some of the most relevant impacts of climate change in Chile are

associated with changes in water availability for agriculture, house-

holds’ consumption (both urban and rural), and industry. Climate

change scenarios suggest that water resources will diminish in most

agricultural zones within the country, imposing significant social

costs that will be unevenly distributed among the population.

In this context, members of EfD Chile, together with almost 20

researchers from Universidad del Desarrollo and Universidad de

Concepción, developed a three-year project supported by the

International Development Research Centre (IDRC, Canada), entitled

“Welfare and Economic Evaluation of Climatic Change Impacts on

Water Resources at River Basin Scale.” The project was led by EfD

researcher Dr Felipe Vásquez Lavín and was implemented in three

Latin American basins: Vergara River (Chile), Chinchiná River (Co-

lombia), and Piraí River (Bolivia).

Interdisciplinary approach

Using an interdisciplinary perspective, the researchers

analyzed the changes in water availability due to climate

change and its associated impacts on both the

economy and the population. They com-

bined a hydrological model, water demand

models for different users, and a geographic

information system in order to estimate the

economic and social impact of changes in water

availability. The study aimed to quantify the relation-

ship among the expected climate change impacts, population

growth, changes in land use, carbon sequestration, and the quality

of life of the basins’ inhabitants. Finally, the study identified the most

efficient adaptation options and the associated institutional changes

needed to cope with the expected impacts of climate change.

Reallocation of water use

The major conclusion of this study is that the Vergara River Basin

economy is highly vulnerable to changes in water availability. The

project identified substantial reallocation of water between farmers

and households and showed that the most vulnerable groups are

poor indigenous populations and small farmers. For example, the

researchers found that, at the basin level, water is being reallocated

from agriculture to household uses, and, within the agricultural

sector, the water is being reallocated from fruits to cereals. This

reallocation is driven by differences in the value of water in one use

relative to another.

The Vergena Hydroeconomic model

The main output of the project is the Vergara Hydroeconomic

Model (VHM). This is a computer model that can be used for policy

assessment because it allows for a rigorous economic analysis of

climate change impacts on water availability and shows where these

impacts are located. We have developed the VHM with separate

modules for each part of the analysis (hydrological, economic, and

social) so that this tool can be easily replicated in other basins.

Results are reaching society

We have participated in several meetings with private

and public institutions, in Chile and abroad, that have

been interested in our results. Some of these institu-

tions have requested our expertise for their ongoing

projects, including the Ministry of Environment,

Ministry of Agriculture, Ministry of Finance, Re-

gional Ministry of Environment, National Corpora-

tion of Forest (CONAF), mining companies

and water utility companies.

At the local level, our research team

EfD IN chIlE

16

was invited by the Presidential Water Delegate to the Regional Government of

the Araucanía Region to contribute scientific support for a broad initiative to

set up a “water dialogue roundtable” within the basin. We used our results to

motivate stakeholders to participate in this initiative, and we will use the VHM

model to evaluate different public policies and adaptation strategies that can

arise from this dialogue. Furthermore, we received funding from the Ministry

of Economy to increase climate change awareness within local communities,

with a special focus on secondary schools. Together with local authorities, we

implemented an information campaign about the expected impacts of climate

change. This project included workshops with communities, including govern-

ment, indigenous groups, and farmers, and it aimed to inform them not only

about the results of the project, but also about the institutional framework that

governs water resources in Chile.

Workshops with secondary schools

Other workshops were targeted at secondary schools. Students were invited

to discuss their ideas about issues such as the river basin, water resources

as a key element for life (and also for the economy), climate change, and their

expectations about the vulnerability of their communities. Additionally, a multi-

disciplinary team helped them build a representation of the Vergara River Basin

using cardboard boxes, in which they were able to actually see how the water

flows within the basin, the relationships across water users, and the external

effects of water consumption.

At the national level, we were invited by the Ministry of Environment to esti-

mate the economic value of water, aimed at the inclusion of water resources

within the national accounting system (“green accounting”). We provided

figures for the economic value of water for different economic sectors, includ-

ing residential, agricultural, industrial, and recreational. Finally, we are provid-

ing research support to evaluate the use of economic instruments for water

resources management in the Villarrica Lake, located in the project region.

Secondary school students building a model of the Vergara River Basin using cardboard boxes.


Felipe Vásquez Lavín, Roberto Ponce Oliva, Sergio Orrego Suaza, Alejandra Sthern, Diego

Rivera, Francisco Fernandez, Alfredo Saldaña, Eduardo Letelier, Alejandra Chovar, Leonardo

Vargas, Dario Felipe Jimenez

References

Fernandez, F., R. Ponce, M. Blanco, D. Rivera, and F. Vásquez-Lavín. 2016. “Water Scarcity and

the Economic Impacts on Small-Scale Farmers at Basin Level: A Risk-Based Hydroeconomic

Modelling Approach.” Water Resources Management http://link.springer.com/article/10.1007/

s11269-016-1227-8

Ponce, R., F. Vásquez, and S. Orrego. 2015. Gestión y Valoración de Riesgos Climáticos a

Escala de Cuenca: Propuestas desde la Cuenca del Río Vergara. Chile. Edited by ECLAC, Chile.


Close-up of the students’ models of the river basin.

17

the EfD impact model

Create platforms fo

r interactio

n

Tailor research

results

for t

arge

t group

s

Co-production of

knowle

dge

EfD research fund

Collaborative researc

h

Infrastructure and staff investments

Mutual learning within the network

PhD and Msc program support to centersPhD Program in Climate Econom

icsat University of Gothenburg

PhD specialization co

urses

Capacity gap

There are too few environmental economists in developing countries

to carry out the necessary analysis of causes of and solutions to

environmental problems.

Analytical gap

Too little analysis is carried out on environmental management for

sustainable inclusive growth.

Communications and policy interaction gap

Even the knowledge that is created seldom makes it to the relevant

policy processes.

Institutional gap

There is often no platform where researchers can be matched with

resources to meet policy challenges. Similarly, academic institutions

in developing countries lack the resources and infrastructure needed

to support knowledge based policies.

Gaps and solutions

EfD program design builds on the premise that there are four important gaps that prevent research

from permeating into policy processes in the developing world. Our program responds to these

gaps with mutually reinforcing program components for policy impact.

18

Climate change and scarcity of natural resources affect all aspects

of society, from the local to the global level. When facing the biggest

challenges of our time, the role of research is to provide reliable,

evidence-based knowledge for wise decisions.

Our response as environmental economists is to analyze and design

policies to manage climate change and to use natural resources in

an efficient and sustainable way for the benefit of people today and

future generations. For more than 25 years, we have built environ-

mental economics capacity globally, through the Environmental Eco-

nomics Program, managed by the Environmental Economics Unit at

the Department of Economics, University of Gothenburg.

The establishment of the EfD Centers over the past decade has

been a collaboration among alumni, colleagues and partners in Cen-

tral America, Chile, China, Ethiopia, Kenya, South Africa, Sweden,

Tanzania and the USA. Three more EfD centers are in the process of

setting up during 2016, in India, Vietnam and Colombia.

We are proud that the EfD Initiative is run jointly with high-quality

universities and research institutes in low and middle income coun-

tries, as well as with Resources for the Future in the US, the world’s

leading academic think-tank in environmental and natural resource

economics.

Sida, the Swedish International Development Cooperation Agency,

provides core funding for the EfD Initiative.

Find out more

www.efdinitiative.org

Follow us on

Twitter: @EfD_initiative

Facebook.com/EfDinitiative

Flickr: EfD Initiative

Co-production of

knowle

dge

EfD research fund

Collaborative researc

h

19

EfD in Sweden

Environmental Economics Unit (EEU), Department of

Economics, University of Gothenburg

Vasagatan 1, Bldg E, PO Box 640

SE 405 30 Gothenburg, Sweden

Leader: Prof. Thomas Sterner

Tel: +46 31 786 4177

[email protected]

EfD in Tanzania

Department of Economics, University of Dar es Salaam

College of Social Sciences (CoSS) Tower Block, 3rd Floor

PO Box 35045, Dar es Salaam, Tanzania

Tel: +255 22 241 0162 or +255 22 241 0252

Director: Prof. Razack Lokina

[email protected]

www.efdinitiative.org/tanzania

EfD in the United States

Resources for the Future (RFF)

1616 P St. NW, Washington, DC 20036, USA

Director, RFF’s EfD Center: Dr. Allen Blackman

Tel: +1 202 328 5073

[email protected]

www.efdinitiative.org/rff

www.rff.org

EfD in Ethiopia

Environment and Climate Research Center (ECRC)

Ethiopian Development Research Institute (EDRI)

Rm 401, 402, 408 and 409 Road and Transport Authority,

Blue Building, near National Stadium PO Box 2479,

Addis Ababa, Ethiopia

Director: Dr. Haileselassie Medhin

Tel: +251 11 550 6066/+251 11 553 8632

[email protected]

www.efdinitiative.org/ethiopia

EfD in Kenya

School of Economics, University of Nairobi

Harry Thuku Road, PO Box 30197-00100

Nairobi, Kenya

Director: Prof. Jane Kabubo-Mariara

Tel: +254 20 318 262, +254 20 226 451 ext. 28122

[email protected]

www.efdinitiative.org/kenya

EfD in South Africa

Environmental-Economics Policy Research Unit (EPRU)

University of Cape Town, School of Economics

Private Bag 7701, Rondebosch, South Africa

Director: Dr. Jane Turpie

Tel: +21 21 701 3420

[email protected]

www.efdinitiative.org/south-africa

EfDEnvironment for Development

Ethiopian Development Research Institute

EfD in Central America

Research Program in Economics and Environment for

Development (EEfD/IDEA), Tropical Agricultural Research

and Higher Education Center (CATIE)

CATIE 7170, Turrialba 30501, Cartago, Costa Rica

Director: Dr. Francisco Alpízar

Tel: +506 2558 2624

[email protected]

www.efdinitiative.org/central-america

EfD in Chile

Research Nucleus on Environmental and Natural Resource

Economics (NENRE)

Department of Economics, Universidad de Concepción

Victoria 471, Barrio Universitario 4070374 Concepción, CH

Director: Prof. Carlos Chávez

Tel: + 56 41 220 4503

[email protected]

www.efdinitiative.org/chile

EfD in China

Environmental Economics Program in China (EEPC)

National School of Development, Peking University

Beijing 100871, China

Director: Prof. Jintao Xu

Tel: +86 10 62767657

[email protected]

www.efdinitiative.org/china

EfD in India

Centre for Research on the Economics of Climate, Food,

Energy and Environment (CECFEE),

Indian Statistical Institute (ISI)

7 S.J.S. Sansanwal Marg, New Delhi 110 016, India

Director: Dr. Mudit Kapoor

[email protected]

EfD in Vietnam

School of Economics, University of Economics Ho Chi

Minh City, 1A Hoang Dieu Street, Phu Nhuan District, Ho

Chi Minh City, Vietnam

Director: Dr. Pham Khánh Nam

[email protected]

EfD in Colombia

The Research Group on Environment, Natural Resources

and Applied Economics Studies (REES)

Universidad de los Andes

Director: Dr. Jorge Bonilla

[email protected]

MAIN DONOR Swedish International Development Cooperation Agency

MAIN PARTNER

efd stories 2015-2016

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