AbstractsBusiness Management & Administration

Modelling payment systems for environmental services in the Mt Elgon ecosystem of Kenya

by Lily Kisaka

Institution: University of Fort Hare
Department: Agric. Econs
Degree: PhD
Year: 2014
Record ID: 1452802
Full text PDF: http://hdl.handle.net/10353/d1013123


Unsustainable patterns of consumption by humankind have increased the rate of change in the natural ecosystems and consequently the levels of stress experienced within the environment. Access to sufficient good quality water is essential and a requirement to meet a number of the Millennium Development Goals (MDGs). However, poor land management and untenable agricultural practices have become the main drivers of the declining watershed services. Upstream farmers often have little or no incentives to take these impacts into account in their decision-making process. Therefore, without investment in ensuring proper land management, the trend in watersheds degradation will continue. Payment for Environmental Services (PES) has emerged as an incentive–based tool that is expected to motivate farmers to improve their agricultural practices. PES is set up to facilitate the process whereby the beneficiaries of environmental services pay compensation to providers of environmental services for conserving the ecosystem. This tool has received increasing attention as a means of creating incentive measures for managing the ecosystem, addressing livelihood issues for the rural poor, and providing sustainable financing for protected areas. The Government of Kenya, as part of its efforts to improve water resource management, is considering use of economic incentive. However, there is insufficient information to guide policy making in that direction. Little is known about the farmers’ preferences for management schemes that will affect land use patterns, their willingness to accept compensation and the willingness of potential buyers to pay for the services. This study evaluates the willingness to accept and the willingness to pay for environmental services with a view to assessing the viability of a PES scheme for the Kuywa Watershed in particular, as well as the Mt. Elgon Ecosystem and other areas with similar conditions. The objectives of the study are threefold (i) to examine respondents preferences for management options for the provision of environmental services in the watershed of River Kuywa of Mt. Elgon Ecosystem; (ii) to evaluate households’ willingness to pay (WTP) and willingness to accept (WTA) payment for improved environmental services from the River Kuywa watershed; and (iii) to propose viable PES approaches for the management of the natural resource of the Kuywa watershed and the Mt. Elgon ecosystem in general. Using six land management attributes relevant to the local situation, the study applied the Page | v conjoint method to evaluate farmers’ preferences for management options for the provision of environmental service and assess farmers’ willingness to pay and willingness to accept payment for environmental services. To enable assessment of viability, an analysis was done of the institutional and legal framework within which the PES scheme would operate. Data were collected using literature review and document analysis, questionnaires, focus group discussions and key informant interviews. Results indicate that…