How Effective Are Biodiversity Conservation Payments in Mexico?

We assess the additional forest cover protected by 13 rural communities located in the southern state of Chiapas, Mexico, as a result of the economic incentives received through the country's national program of payments for biodiversity conservation. We use spatially explicit data at the intra-community level to define a credible counterfactual of conservation outcomes. We use covariate-matching specifications associated with spatially explicit variables and difference-in-difference estimators to determine the treatment effect. We estimate that the additional conservation represents between 12 and 14.7 percent of forest area enrolled in the program in comparison to control areas. Despite this high degree of additionality, we also observe lack of compliance in some plots participating in the PES program. This lack of compliance casts doubt on the ability of payments alone to guarantee long-term additionality in context of high deforestation rates, even with an augmented program budget or extension of participation to communities not yet enrolled.