Analysis of the cost-effectiveness for ecosystem service provision and rural income generation: a comparison of three different programs in Southern Ecuador

Abstract

In recent years, new tools for funding nature conservation have been designed. Because poverty is often significant in areas with high biodiversity, the improvement of local livelihoods is frequently considered as a secondary goal of new financing mechanisms besides nature conservation. The buffer zone of the Podocarpus National Park in Ecuador is such a high biodiversity zone. In this paper, we compare the cost-effectiveness and development potential of three different mechanisms to finance nature conservation implemented in this buffer zone, namely (a) an organic coffee label, (b) the Socio Bosque Program, a nationwide payment scheme for private forest conservation, and (c) FORAGUA, a regional water fund. This paper describes the functioning and the scope of the mechanisms and analyses their environmental and socio-economic impacts which are compared to the total costs. Results show that the water fund has the highest additionality in ecosystem service provision, while the payment scheme is the most cost-effective both for current as for increased ecosystem service provision and for extra rural job creation. Organic coffee certification has the highest positive impact on rural income creation.