Date of Award

2008

Document Type

Thesis

Degree Name

Master of Science (MS)

Department

Community Development and Applied Economics

First Advisor

Farley, Joshua

Abstract

This thesis examines the feasibility of economic incentives for reforestation, with improved water quality being one potential benefit, in the Fond D’or watershed of Saint Lucia. Population growth, economic development, and the onset of climate change have decreased the environmental quality in Small Island Developing State (SIDS) while increasing risk to the islands’ water security. The unique topography and geology of Caribbean island nations contribute to the challenges of managing freshwater resources. The governments of SIDS often lack the human and financial resources to provide potable water for their citizens, as well as to monitor and enforce environmental regulations limiting land use in watersheds. Therefore, a new approach to watershed management in Saint Lucia is imperative for the provision of valuable ecosystem services at the local, regional, and global scales. Payments for ecosystem services (PES) are a promising approach to the protection and maintenance of public ecosystem services where there is little incentive for private landowners to provide them. The first article explores household willingness-to-pay (WTP) for reforestation in Fond D’or watershed. The contingent valuation method was used to obtain residents’ WTP for a hypothetical scenario in which an increase in water users’ fees are used to fund a program where farmers in the upper watershed are compensated for taking land near water sources out of agricultural production for reforestation. The findings from 294 household surveys provide a description of the state of water quality and quantity in the Fond D’or, domestic water uses and sources, as well as attitudes and opinions about current water service. Bivariate analyses were performed to identify underlying factors that influence WTP, revealing that increased WTP is not a result of higher education and income. Rather, residence in a particular community group likely influences opinions about water, ultimately shaping WTP. Lastly, I discuss WTP in terms of its potential contribution to a PES scheme in Saint Lucia; WTP by local beneficiaries represents one potential funding source for PES mechanisms as well as public support for environmental improvement programs. The second article describes a methodological approach to constructing a PES scheme in the Fond D’or watershed. Of the five environmental policy approaches— prescription, penalties, property rights, persuasion, and payments—payment is likely to be the most feasible method to influence private land management decisions for the provision of ecosystem services for the public good. This article draws upon existing PES schemes for hydrological services around the globe to provide key lessons for expanding the use of the instrument to Saint Lucia. I apply these lessons to the social, political, and institutional context of Saint Lucia, identifying opportunities for and challenges to developing local or regional payment schemes for ecosystem services in the Fond D'or watershed. I outline the steps to constructing a PES and recommend further research to Saint Lucian policymakers.

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