Estimating the Economic Value of forest ecosystem services using stated preference methods: the case of Kakamega forest, Kenya

Abstract

According to the Millennium Ecosystem Assessment, in the next 40 years, tropical forests are among the biomes projected to lose habitat and species most rapidly. Yet these biomes provide numerous ecosystem services that confer local, regional and global economic benefits. One of these forests, and the focus of this study, is Kakamega forest in Kenya. Kakamega Forest is the last remaining rainforest in Kenya and is home to numerous endemic fauna and flora species while it provides crucial ecosystem services to a large number of people. Moreover, the conservation of the forest incurs an opportunity cost on the surrounding communities. Although it could be that Kakamega forest has been degraded due to its low economic value, it is far more likely that the forest holds significant value which cannot be realised due to the public-good nature of many of the services it provides and an ill-enforced set of property rights. This study forms part of a wider research effort to estimate the Total Economic Value of Kakamega Forest in Kenya, with the aim of demonstrating the economic value of the forest’s goods and services. It specifically focuses on the estimation of the economic value of a subset of services that are relevant to the local communities. For the estimation of these values this study employed two different stated preference methods (Contingent Valuation and Choice Experiment) in order to assess the welfare effects to local communities of changes in the provision of forest-related ecosystem services. These services were identified by the respondents and were crucial to their livelihood. The findings of these two studies are presented in the main body of this dissertation, which is comprised by three chapters (chapters 2-4). Both methods demonstrated that there is significant willingness to pay (WTP) for improvement in the provision of the following services: water availability, prevention of soil erosion and future supply of forest products. The highest WTP was expressed for implementing measures that prevent soil erosion, which suggests that any conservation measures should be geared towards addressing this problem. The CV method also assessed the suitability of a non-monetary payment vehicle (labour meals) and found it to be an appropriate means to elicit WTP in the setting of the study.. Finally, the study found that a major determinant of respondents’ utility, and thus choices, has been their perception of the severity of the environmental conditions that they face. This suggests that targeted educational campaigns can play a role in increasing respondents’ awareness with regard to the finite nature of the forest resources and thus shift their behaviour into more sustainable ways of interacting with the forest.