Publication: International Willingness to Pay for the Protection of the Amazon Rainforest
Loading...
Date
2019-03
ISSN
Published
2019-03
Author(s)
Editor(s)
Abstract
The Amazon rainforest, the world's largest tropical rainforest and an important constituent of the global biosphere, continues degrading by rapid deforestation, which is expected to continue despite policies to prevent it. Current international funding to protect the Amazon rainforest focuses on benefits from reduced carbon emissions. This paper examines an additional rationale for Amazon protection: the valuation of its biodiversity and forests as natural heritage to the international community. To measure the economic value of this benefit, the paper examines U.S. and Canadian households' willingness to pay to help finance Amazon rainforest protection. The analysis finds that mean willingness to pay to avoid forest losses projected to occur by 2050 despite current protective policies is $92 per household per year. Aggregating across all households and considering the area protected, the analysis finds that preserving the Amazon rainforest is worth $3,168 per hectare (95-percent confidence interval $1,580-$4,756), on average, to households in the United States and Canada. Considering households in other developed countries would generate yet larger estimates of aggregate value, likely comparable to the carbon benefits from rainforest protection. The results reveal high values of the Amazon rainforest to people geographically distanced from it, lending support to international efforts to reduce deforestation in the Amazon.
Link to Data Set
Citation
“Siikamaki, Juha V.; Krupnick, Alan; Strand, Jon; Vincent, Jeffrey R.. 2019. International Willingness to Pay for the Protection of the Amazon Rainforest. Policy Research Working Paper;No. 8775. © World Bank. http://hdl.handle.net/10986/31401 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Geopolitics and the World Trading System(Washington, DC: World Bank, 2024-12-23)Until the beginning of this century, the GATT/WTO system worked. Economic research provided a compelling explanation. It showed that if governments maximize the well-being of their own countries broadly defined, GATT/WTO principles would facilitate mutually beneficial cooperation over their trade policy choices. Now heightened geopolitical rivalry seems to have undermined the WTO. A simple transposition of the previous rationalization suggests that geopolitics and trade cooperation are not compatible. The paper shows that this is only true if rivalry eclipses any consideration of own-country well-being. In all other circumstances, there are gains from trade cooperation even with geopolitics. Furthermore, the WTO’s relevance is in question only if it adheres too rigidly to its existing rules and norms. Through measured adaptation to the geopolitical imperative, the WTO can continue to thrive as a forum for multilateral trade cooperation in the age of geopolitics.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication From Patriarchy to Policy(Washington, DC: World Bank, 2025-05-29)Legal institutions play an important role in shaping gender equality in economic domains, from inheritance to labor markets. But where do gender equal laws come from? Using cross-country data on social norms and legal equality, this paper investigates the socio-cultural roots of gender inequity in the legal system and its implications for female labor force participation. To identify the impact of social norms, the analysis uses an empirical strategy that exploits pre-modern differences in ancestral patriarchal culture as an instrument for present-day gender norms. The findings show that ancestral patriarchal culture is a strong predictor of contemporary norms, and conservative social norms are associated with more gender inequality in the de jure legal framework, the de facto implementation of laws, and the labor market. The paper presents evidence for a political selection mechanism linking norms to laws: countries with more conservative norms elect political leaders who are more hostile to gender equality, who then pass less progressive legislation. The results highlight the cultural roots and political drivers of legalized gender inequality.Publication Global Socio-economic Resilience to Natural Disasters(Washington, DC: World Bank, 2025-05-22)Most disaster risk assessments use damages to physical assets as their central metric, often neglecting distributional impacts and the coping and recovery capacity of affected people. To address this shortcoming, the concepts of well-being losses and socio-economic resilience—the ability to experience asset losses without a decline in well-being—have been proposed. This paper uses microsimulations to produce a global estimate of well-being losses from, and socio-economic resilience to, natural disasters, covering 132 countries. On average, each $1 in disaster-related asset losses results in well-being losses equivalent to a $2 uniform national drop in consumption, with significant variation within and across countries. The poorest income quintile within each country incurs only 9% of national asset losses but accounts for 33% of well-being losses. Compared to high-income countries, low-income countries experience 67% greater well-being losses per dollar of asset losses and require 56% more time to recover. Socio-economic resilience is uncorrelated with exposure or vulnerability to natural hazards. However, a 10 percent increase in GDP per capita is associated with a 0.9 percentage point gain in resilience, but this benefit arises indirectly—such as through higher rate of formal employment, better financial inclusion, and broader social protection coverage—rather than from higher income itself. This paper assess ten policy options and finds that socio-economic and financial interventions (such as insurance and social protection) can effectively complement asset-focused measures (e.g., construction standards) and that interventions targeting low-income populations usually have higher returns in terms of avoided well-being losses per dollar invested.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication A "Delphi Exercise" as a Tool in Amazon Rainforest Valuation(World Bank Group, Washington, DC, 2014-12)The Amazon rainforest, the world's largest and most biodiverse, represents a global public good of which 15 percent has already been lost. The worldwide value of preserving the remaining forest is today unknown. A "Delphi" exercise was conducted involving more than 200 environmental valuation experts from 36 countries, who were asked to predict the outcome of a survey to elicit willingness to pay for Amazon forest preservation among their own countries' populations. Expert judgments of average willingness-to-pay levels, per household per year, to fund a plan to protect all of the current Amazon rainforest up to 2050, range from $4 to $36 in 12 Asian countries, to near $100 in Canada, Germany, and Norway, with other high-income countries in between. Somewhat lower willingness-to-pay values were found for a less strict plan that allows a 12 percent further rainforest area reduction. The elasticity of experts' willingness-to-pay assessments with respect to own-country per capita income is slightly below but not significantly different from unity when results are pooled across countries and income is adjusted for purchasing power parity.Publication How Much is the Amazon Worth? The State of Knowledge Concerning the Value of Preserving Amazon Rainforests(World Bank, Washington, DC, 2013-10)This paper surveys the current state of knowledge concerning the value of the Amazon rainforest, including a survey of work to date to quantify changes in economic values when the rainforest cover changes. The focus is on local and regional impacts of forest loss or protection, including both gross values of forest protection and opportunity costs of converting the forest to other uses including agriculture. Important gross value items surveyed are timber and non-timber product extraction from a sustainably maintained rainforest; local values of eco-tourism; biological resources including bio-prospecting; a range of hydrological impacts including watershed protection, hydropower production, and changes in rainfall patterns; and impacts of forest fires and their control. Mapping such values in geographical space is of high value for implementing efficient and effective (Reducing Emissions from Deforestation and Forest Degradation ) programs for protecting the remaining forest. The current data basis for such mapping is found to be quite weak and in need of improvement for all value elements.Publication Valuing Global Public Goods : A European Delphi Stated Preference Survey of Population Willingness to Pay for Amazon Rainforest Preservation(World Bank, Washington, DC, 2013-10)The Amazon Rainforest is a global public good. As such, and given that 15 percent of the original Amazon forest area has already been lost, households worldwide might be willing to pay to reduce or avoid additional losses. A full elicitation of global preferences for valuing preservation of the current forest, using stated-preference population surveys, would be costly and time consuming. Alternatively, this paper uses a Delphi stated-preference technique in which 48 European environmental valuation experts were asked to provide "best guesses" on the possible outcomes of population surveys in their own countries and Europe as a whole. The expert judgments indicate willingness to pay in Europe for preserving the current Amazon Rainforest of about 28 Euro per household per year on average; a slightly lower value is inferred for a plan that allows a 10 percent future reduction from the current rainforest area. The income elasticity of experts' stated willingness to pay with respect to per-capita income in their own countries is in the range 0.5-0.8. These findings indicate that Delphi studies might be used more widely as a tool for global benefit transfer.Publication Assessment of the Risk of Amazon Dieback(World Bank, 2011)The Amazon basin is a key component of the global carbon cycle. The old-growth rainforests in the basin represent storage of ~ 120 petagrams of carbon (Pg C) in their biomass. Annually, these tropical forests process approximately 18 Pg C through respiration and photosynthesis. This is more than twice the rate of global anthropogenic fossil fuel emissions. The basin is also the largest global repository of biodiversity and produces about 20 percent of the world's flow of fresh water into the oceans. Despite the large carbon dioxide (CO2) efflux from recent deforestation, the Amazon rainforest ecosystem is still considered to be a net carbon sinks of 0.8-1.1 Pg C per year because growth on average exceeds mortality (Phillips et al. 2008). However, current climate trends and human-induced deforestation may be transforming forest structure and behavior (Phillips et al. 2009). Increasing temperatures may accelerate respiration rates and thus carbon emissions from soils (Malhi and Grace 2000). High probabilities for modification in rainfall patterns (Malhi et al. 2008) and prolonged drought stress may lead to reductions in biomass density. Resulting changes in evapo-transpiration and therefore convective precipitation could further accelerate drought conditions and destabilize the tropical ecosystem as a whole, causing a reduction in its biomass carrying capacity or dieback. In turn, changes in the structure of the Amazon and its associated water cycle will have implications for the many endemic species it contains and result in changes at a continental scale. Clearly, with much at stake, if climate-induced damage alters the state of the Amazon ecosystem, there is a need to better understand its risk, process, and dynamics. The objective of this study is to assist in understanding the risk, process, and dynamics of potential Amazon dieback and its implications.Publication Ecosystem Services and Green Growth(2012-10)"Ecosystem services" has become a catch-phrase for the complex connections between the natural environment and human well-being. This paper considers the impact of changes in the supply of ecosystem services, and programs to increase their supply, on near-term growth of gross domestic product. It focuses on the relationship between locally generated versus transboundary services and growth in developing countries, where the highest rates of ecosystem degradation tend to be found. There is a common perception that there is a tradeoff between environmental protection and economic growth, especially in the near term. This perception can make policymakers reluctant to support environmental protection. Where the environment is a source of economically important services, then environmental protection may stimulate growth of gross domestic product instead of reducing it. The paper considers evidence on the economic value of regulating services; the degree to which ecosystems actually supply some of the services they are commonly assumed to supply; and the near-term growth implications of restoring ecosystems, and reducing their loss. This leads to a discussion on the effectiveness of programs intended to reduce ecosystem loss, with a focus on protected areas and payments for ecosystem services, and the effects of these programs on poverty alleviation.
Users also downloaded
Showing related downloaded files
Publication Media and Messages for Nutrition and Health(World Bank, Washington, DC, 2020-06)The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication The Journey Ahead(Washington, DC: World Bank, 2024-10-31)The Journey Ahead: Supporting Successful Migration in Europe and Central Asia provides an in-depth analysis of international migration in Europe and Central Asia (ECA) and the implications for policy making. By identifying challenges and opportunities associated with migration in the region, it aims to inform a more nuanced, evidencebased debate on the costs and benefits of cross-border mobility. Using data-driven insights and new analysis, the report shows that migration has been an engine of prosperity and has helped address some of ECA’s demographic and socioeconomic disparities. Yet, migration’s full economic potential remains untapped. The report identifies multiple barriers keeping migration from achieving its full potential. Crucially, it argues that policies in both origin and destination countries can help maximize the development impacts of migration and effectively manage the economic, social, and political costs. Drawing from a wide range of literature, country experiences, and novel analysis, The Journey Ahead presents actionable policy options to enhance the benefits of migration for destination and origin countries and migrants themselves. Some measures can be taken unilaterally by countries, whereas others require close bilateral or regional coordination. The recommendations are tailored to different types of migration— forced displacement as well as high-skilled and low-skilled economic migration—and from the perspectives of both sending and receiving countries. This report serves as a comprehensive resource for governments, development partners, and other stakeholders throughout Europe and Central Asia, where the richness and diversity of migration experiences provide valuable insights for policy makers in other regions of the world.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.Publication South Asia Development Update, April 2024: Jobs for Resilience(Washington, DC: World Bank, 2024-04-02)South Asia is expected to continue to be the fastest-growing emerging market and developing economy (EMDE) region over the next two years. This is largely thanks to robust growth in India, but growth is also expected to pick up in most other South Asian economies. However, growth in the near-term is more reliant on the public sector than elsewhere, whereas private investment, in particular, continues to be weak. Efforts to rein in elevated debt, borrowing costs, and fiscal deficits may eventually weigh on growth and limit governments' ability to respond to increasingly frequent climate shocks. Yet, the provision of public goods is among the most effective strategies for climate adaptation. This is especially the case for households and farms, which tend to rely on shifting their efforts to non-agricultural jobs. These strategies are less effective forms of climate adaptation, in part because opportunities to move out of agriculture are limited by the region’s below-average employment ratios in the non-agricultural sector and for women. Because employment growth is falling short of working-age population growth, the region fails to fully capitalize on its demographic dividend. Vibrant, competitive firms are key to unlocking the demographic dividend, robust private investment, and workers’ ability to move out of agriculture. A range of policies could spur firm growth, including improved business climates and institutions, the removal of financial sector restrictions, and greater openness to trade and capital flows.