Can financial incentives encourage a more pro-environmental behavior? - A case study of Payments for Environmental Services in Costa Rica

Abstract: Financial incentives are increasingly being used to promote provision of environmental services (ES). Costa Rica was early with launching their Payments for Environmental Services (PES) scheme that rewards provision of ES and prevents further losses of the same. This study examines the links between Costa Rican PES scheme, pro-environmental behavior and forest conservation. PES-beneficiaries and farmers that do not benefit from the PES scheme (non-beneficiaries) were interviewed and their answers were compared in the process of analyzing the connections between PES, pro-environmental behavior and forest conservation. The purpose of the interview questions was to frame features that induce pro-environmental behavior and investigate the interviewees’ forest ownership. The result from the statistical analysis showed correlation between the pro-environmental behavior and forest conservation among non-beneficiaries, i.e. where the forest owners were not financially compensated. There was not a convincing link between participating in the PES program and demonstrating pro-environmental behavior, but the beneficiaries had somewhat stronger tendency to demonstrate pro-environmental behavior. This tendency correlated with years of education, which has a recognized positive effect on pro-environmental behavior and was significantly higher for the beneficiaries, indicating that the level of education, and not the participation in the program, caused the altered tendency for pro-environmental behavior.