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 Intergenerational Income Mobility around the World(Washington, DC: World Bank, 2025-07-09)This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.Publication The Impact of Trade Promotion Organizations on Exports(Washington, DC: World Bank, 2025-08-13)This paper examines the impact of trade promotion organizations on exports during the COVID-19 pandemic using a World Bank survey. The results suggest that increased trade promotion organization budgets significantly boosted exports during downturns but had no effect during the recovery phase. Interestingly, e-commerce programs adopted by trade promotion organizations negatively affected exports during downturns as they diverted resources away from productive support, especially for sectors not intensive in online trade. These findings suggest that countercyclical trade promotion organizations budgets may enhance trade resilience during similar global shocks.Publication The Future of Poverty(Washington, DC: World Bank, 2025-07-15)Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities.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 Climate Vulnerability and Job Accessibility(Washington, DC: World Bank, 2025-08-11)Many developing cities are facing rapid population growth and extreme climate events. This paper examines the link between job accessibility and climate vulnerability, using data from Antananarivo, Madagascar, which frequently experiences flooding. As in other countries, the analysis finds that men’s commutes are longer than women’s, who tend to walk to work or use public transport. Even after controlling for observables and the potential endogeneity bias associated with commute time, the findings show that climate vulnerability negatively impacts wages, as people avoid commuting long to work due to anticipated potential climate risks. Building climate resilience into urban transport is therefore essential. As predicted by theory, the evidence also shows that the value of commuting is positive, and walking is disadvantageous. Motorized commuting yields higher returns, which could lead to overuse of private cars and taxis, posing decarbonization challenges.
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 World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Adaptation of the Calculator of Social and Environmental Impacts from Small-Scale Gold Mining in the Amazon(Washington, DC: World Bank, 2023-11-09)Over the past decade, illegal gold extraction has increased significantly in the Amazon region, partly due to the high international prices of this mineral, the less stringent attitude of some countries in relation to the environment and the pursuit of immediate economic opportunities. Furthermore, this illicit activity is closely intertwined with other illegal practices, such as drug trafficking, human trafficking, and the trafficking of endangered species. This has repercussions not just for the region's ecological wealth, but also for the physical well-being of those safeguarding their lands and the health of communities living in proximity to the extraction zones due to the contamination of their rivers and, consequently, their primary sources of food, such as fish. Despite the international effort to recognize the socio-environmental repercussions of this activity, there are still gaps on this issue, mainly due to the economic losses that this activity represents.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.