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Direct vs indirect payments for environmental services: the role of relaxing market constraints

Groom, Ben ORCID: 0000-0003-0729-143X and Palmer, Charles ORCID: 0000-0002-1252-179X (2008) Direct vs indirect payments for environmental services: the role of relaxing market constraints. Discussion paper series (no. 36.2008). University of Cambridge. Department of Land Economy, Cambridge, UK.

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Abstract

Ferraro and Simpson (2002) argue that when markets are competitive, direct payments for environmental services are more cost effective in achieving environmental goals than indirect payments, say, for capital. However, when eco-entrepreneurs face non-price rationing in input or output markets, as is typical for e.g. credit in developing countries for, we show that interventions which relax constraints can be more cost-effective than direct payments. One corollary of this is that such indirect payments can be preferred to direct payments by interveners (e.g. NGOs) and eco-entrepreneurs alike. Both of these outcomes are more likely when constraints are severe.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.landecon.cam.ac.uk/index.htm
Additional Information: © 2008 The authors
Divisions: Geography & Environment
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic Theory
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q24 - Land
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q11 - Aggregate Supply and Demand Analysis; Prices
Date Deposited: 14 May 2010 11:15
Last Modified: 15 Sep 2023 23:13
URI: http://eprints.lse.ac.uk/id/eprint/27959

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