Exploring demand for tree planting in a payment for environmental services project in Lake Victoria Basin, Kenya

Abstract

With growing interest in payment for environmental services (PES) as a means to promote conservation (Wunder et al., 2008), a persistent question for programme designers concerns the likely cost of achieving a given environmental objective (Ferraro, 2008; Jindal et al., 2013). PES assumes that landowners will undertake conservation investments if they get paid for their opportunity cost of doing so, but those costs are unknown to outsiders. In general, opportunity costs will vary with farm and farmer characteristics. PES initiatives can be designed more cost effectively if they can estimate the likely payments that landowners will require to undertake conservation. This chapter examines such questions in the context of a forestry programme in the Lake Victoria basin in Western Kenya that encourages local farmers to plant trees. We analyse farmers’ demand for planting trees on their land as a function of farm and farmer characteristics and also as a function of a hypothetical conditional payment that farmers could receive for planting each additional tree. The results presented here are based on a survey of local households in the Yala and Nyando river basins, which contribute a significant proportion of water (and silt) flow into Lake Victoria (Swallow et al., 2009). The research was conducted in the context of the Global Environment Facility-funded Western Kenya Integrated Ecosystem Management (WKIEM) project, which aims to conserve these river basins through forestry activities with local farmers.