Direct vs indirect payments for environmental services
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Date
2008Type
- Working Paper
ETH Bibliography
yes
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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. Show more
Publication status
publishedJournal / series
Environmental Economy and Policy Research Discussion Paper SeriesVolume
Publisher
Environmental Economy and Policy Research GroupOrganisational unit
03728 - Engel, Stefanie (ehemalig)
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ETH Bibliography
yes
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