Economía ambiental

EC O L O G IC A L E C O N O M IC S 6 5 ( 2 0 08 ) 72 5 –7 36

a v a i l a b l e a t w w w. s c i e n c e d i r e c t . c o m

w w w. e l s e v i e r. c o m / l o c a t e / e c o l e c o n

Paying for the hydrological services of Mexico's forests: Analysis, negotiations and results
Carlos Muñoz-Piñaa,⁎, Alejandro Guevarab , Juan Manuel Torresc , Josefina Brañaa
a

Instituto Nacional deEcología, Mexico Universidad Iberoamericana, Mexico c Centro de Investigación y Docencia Económica, Mexico
b

AR TIC LE I N FO
Article history: Received 14 September 2005 Accepted 27 July 2007 Available online 25 October 2007 Keywords: Deforestation Positive externalities Payment for environmental services Watershed protection Mexico

ABS TR ACT
Mexico faces both high deforestation andsevere water scarcity. The Payment for Hydrological Environmental Services (PSAH) Program was designed to complement other policy responses to the crisis at the interface of these problems. Through the PSAH, the Mexican federal government pays participating forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not currently competitive.Funding comes from fees charged to water users, from which nearly US $18 million are earmarked for payments of environmental services. Applicants are selected according to several criteria that include indicators of the value of water scarcity in the region. This paper describes the process of policy design of the PSAH, the main actors involved in the program, its operating rules, and provides apreliminary evaluation. One of the main findings is that many of the program's payments have been in areas with low deforestation risk. Selection criteria need to be modified to better target the areas where benefits to water users are highest and behavior modification has the least cost, otherwise the program main gains will be distributive, but without bringing a Pareto improvement in overallwelfare. © 2007 Elsevier B.V. All rights reserved.

1.

Introduction

Water scarcity and deforestation are two of Mexico's most important environmental challenges. According to Mexico's National Water Commission (CNA), two thirds of the country's 188 most important aquifers are overexploited (Comisión Nacional del Agua, 2003), while an additional 28% are fully used. According to Ávila et al.(2005), this crisis was created by environmentally perverse subsidies to electricity for water pumping (nearly US$700 million per year) and the failure to price water according to its scarcity. The federal government's strategy to deal with the problem has consisted mainly in

expanding the physical infrastructure through engineering projects, with very few examples of demand management throughprices, and an almost complete absence of environmental management instruments. Even using the conservative estimate of 1.3% annual deforestation reported for the 1990s (Torres Rojo and Flores Xolocotzi, 2001), it is evident that Mexico has been losing its forests at an alarming rate. According to its National Forest Inventory, Mexico had nearly 63 million hectares (ha) of forest in 2000, of whichabout half was tropical forest. The main driver of forest loss has been conversion to agriculture and cattle ranching. Between 1993 and 2000, approximately

⁎ Corresponding author. Instituto Nacional de Ecología, Periférico 5000, 3r piso, Mexico City, 04530, Mexico. Fax: +52 55 54245408. E-mail address: carmunoz@ine.gob.mx (C. Muñoz-Piña). 0921-8009/$ – see front matter © 2007 Elsevier B.V.All rights reserved. doi:10.1016/j.ecolecon.2007.07.031

726

EC O LO GIC A L E CO N O M ICS 6 5 ( 2 00 8 ) 7 2 5 –7 36

3.1 million ha of forests were transformed into agricultural fields, and an additional 5.1 million ha were converted to pastures (Velásquez et al., 2002), an annual expansion of these land uses of 2.0% and 4.6%, respectively. Before introducing the concept of payment for...