Combining auctions and performance-based payments in a forest enrichment field trial in Western Kenya. uri icon

abstract

  • Cost-effectiveness is an important aspect in the assessment of payments for environmental services (PES) initiatives. In participatory field trials with communities in Western Kenya, we combined procurement auctions for forest enrichment contracts with performance-based payments and compared the outcomes with a baseline scenario currently used by the Kenyan Forest Service. Procurement auctions were the most cost-effective. The competitive nature of the auction reduced contracting expenses (provision costs), and the result-oriented payments provided additional incentives to care for the planted seedlings, resulting in their improved survival rates (service quantity). These gains clearly exceeded increases in transaction costs associated with conducting an auction. The number of income-poor auction participants and winners was disproportionately high and local institutional buy-in was remarkably strong. Our participatory approach may, however, require adaptations when conducted at a larger scale. Although the number of contracts we monitored was limited and prohibited the use of statistical tests, our study is one of the first to reveal the benefits of using auctions for PES in developing countries
  • Cost-effectiveness is an important aspect in the assessment of payments for environmental services (PES) initiatives. In participatory field trials with communities in Western Kenya, we combined procurement auctions for forest enrichment contracts with performance-based payments and compared the outcomes with a baseline scenario currently used by the Kenyan Forest Service. Procurement auctions were the most cost-effective. The competitive nature of the auction reduced contracting expenses (provision costs), and the result-oriented payments provided additional incentives to care for the planted seedlings, resulting in their improved survival rates (service quantity). These gains clearly exceeded increases in transaction costs associated with conducting an auction. The number of income-poor auction participants and winners was disproportionately high and local institutional buy-in was remarkably strong. Our participatory approach may, however, require adaptations when conducted at a larger scale. Although the number of contracts we monitored was limited and prohibited the use of statistical tests, our study is one of the first to reveal the benefits of using auctions for PES in developing countries. Combinando Subastas y Pagos Basados en Desempeno en un Ensayo de Campo de Enriquecimiento de Bosques en el Oeste de Kenia
  • Resumen La rentabilidad es un aspecto importante en la valoracion de las iniciativas de los pagos por servicios ambientales (PSA). En los ensayos de campo participativos con comunidades del Oeste de Kenia, combinamos las subastas de procuracion para contratos de enriquecimiento de bosques con los pagos basados en desempeno y comparamos los resultados con un escenario de linea base usado actualmente por el Servicio de Bosques de Kenia. Las subastas de procuracion fueron las mas rentables. La naturaleza competitiva de la subasta redujo los gastos de contratacion (costos de provision) y los pagos orientados al resultado proporcionaron incentivos adicionales para cuidar las plantulas, resultando en el incremento en las tasas de supervivencia (cantidad de servicio). Estas ganancias claramente excedieron los incrementos en los costos de transaccion asociados con la conduccion de una subasta. El numero de participantes de bajo ingreso en la subasta y el numero de ganadores fue desproporcionalmente alto y la compra institucional local fue notablemente fuerte. Nuestro acercamiento participativo puede, sin embargo, requerir adaptaciones al conducirse en una escala mayor. Mientras que el numero de contratos que monitoreamos fue limitado y prohibio el uso de pruebas estadisticas, nuestro estudio es uno de los primeros en revelar los beneficios de usar subastas para PSA en paises en desarrollo.

publication date

  • 2014
  • 2014
  • 2014