The Drew Lab at Columbia University

Home » Uncategorized » Making Conservation Pay: The Advantages of Incentive Payments

Making Conservation Pay: The Advantages of Incentive Payments


Over Compensation Schemes in Mitigating Human-Carnivore Conflicts

by Adam Pekor, MA student

Around the world, fostering the coexistence of people and large carnivores is a major challenge.  From wolves in the U.S. to tigers in India, carnivores impose substantial costs on human communities through livestock depredation. As a result, they are often killed in retaliation for attacking cattle and other domestic animals. This human-carnivore conflict creates a lose-lose situation for people and wildlife: people lose critical income from carnivore attacks, and carnivore populations suffer from retaliatory killings.  The decline or loss of carnivores can also have negative consequences for local ecosystems, in which carnivores play an important role, and for local economies, since carnivores are an important driver of wildlife tourism.

In East Africa, human-carnivore conflict is the primary driver of the decline of lion numbers. In light of the rapid expansion of people in the region, viable lion populations are not expected to survive outside large protected areas such as Serengeti National Park or the Selous Game Reserve beyond the next few decades. Accordingly, mitigating the conflict between people and lions is critical to both the conservation of lions outside of parks and the well-being of the people with whom they share the landscape. Since the financial burden that lions impose lies at the core of the problem, figuring out how to eliminate that burden without eliminating lions is essential.

Lion

Retaliatory killing is the primary driver of the decline of East Africa’s lion populations. (C) Adam Pekor

In East and Southern Africa, the dominant approach to minimizing the financial impact of carnivores has been to compensate people for the livestock losses they suffer as a result of carnivore attacks. Although some compensation schemes have yielded positive results, many have suffered from a variety of problems that have rendered them largely ineffective. As explained below, conservation incentive payment (CIP) programs—in which people are paid directly for helping to conserve carnivores—are a promising alternative approach to mitigating the intense human-carnivore conflicts that persist in Africa.

The Problems with Compensation Schemes

Among the many problems that have plagued livestock compensation schemes in Africa, perhaps the most serious is the fact that reimbursement is often grossly inadequate. Because compensation generally requires proof that a livestock loss was caused by a carnivore, many losses (i.e., those that cannot be proved) go uncompensated. In one program in Botswana, for example, net compensation amounted to only 42% of the value of depredated livestock once uncompensated claims were considered. Thus, because such schemes do not make people whole for the losses they suffer, they are unlikely to increase local tolerance of carnivores.

Compounding this problem are the significant time lags and transaction costs associated with many compensation schemes. Because compensation claims can take many months to be paid, livestock owners are often forced to deal with unpredictable and extended financial disruptions. In addition, obtaining compensation can be a lengthy and time-consuming process, requiring a livestock owner to discover and report a kill, meet with scouts and claims officers, potentially appeal the denial of a claim, and show up at a designated time and place to receive payment. All of these steps take valuable time and energy that could be spent on other activities.

Cattle

Livestock compensation schemes are plagued by problems of inadequate reimbursement, time lags, and high transaction costs. (C) Adam Pekor

Even when compensation schemes do provide adequate levels of payment, they aren’t likely to minimize carnivore-livestock attacks. If full compensation is paid for a loss, livestock owners lose much of their incentive to minimize attacks since the financial costs of such attacks will be borne by the compensating entity (e.g., the government or an NGO). Further, this “moral hazard” perversely incentivizes livestock owners to let undesirable animals (e.g., sick or old cattle) be attacked in order to obtain compensation. In Kenya, at least one compensation scheme has been discontinued due to fraudulent claims being filed.

As a result of these problems, many compensation schemes in East and Southern Africa have failed to deliver satisfactory results for people or for carnivores.

The Advantages of Conservation Incentive Payment Programs

Conservation incentive payments (CIPs) address the costs of conservation in a fundamentally different way.  Under a CIP program, communities are paid a predetermined amount specifically for helping to achieve a conservation goal. The key feature of a CIP program is that payment is contingent upon a community taking agreed-upon conservation actions and/or achieving agreed-upon results. If the agreed upon actions or results are not taken or achieved, no payment is made.

Most commonly, CIPs have been used in the payments-for-ecosystem services context (e.g., paying communities to maintain forests for carbon sequestration). However, in a handful of cases, CIPs have been used to mitigate human-carnivore conflicts. In those cases, payments have been conditioned on, for example, the utilization of enhanced livestock guarding methods (an action-based CIP scheme) or an increase in carnivore numbers (a results-based CIP scheme). In either case, the key to establishing an effective CIP program has been setting the payment level to meet or exceed the costs carnivores are expected to impose. By making carnivore conservation more attractive than carnivore eradication, these programs are able to align a community’s financial interests with conservation goals in a way that compensation schemes cannot.

People

CIP programs can be designed to reward livestock owners for boma construction and maintenance practices that minimize carnivore attacks, thereby aligning community financial interests with conservation goals. (C) Adam Pekor

In addition to the strong incentives they create, CIP programs offer a number of key advantages over compensation schemes. Most importantly, by rewarding communities for conserving wildlife, CIP programs treat local stakeholders as essential partners in conservation. By recognizing the role of local people in achieving conservation goals, CIPs encourage their participation in and commitment to conservation efforts. By contrast, under a compensation scheme, payments are divorced from conservation outcomes—that is, the actions of local people are treated as external to the conservation endeavor. As a result, local stakeholders are unlikely to exhibit the same support for conservation efforts.

Another key advantage of CIP programs is that they allow local people to profit from conservation. As noted above, the amounts payable under a CIP program are generally set to equal or exceed the community’s anticipated losses from carnivore attacks.  So, as long as the community fulfills its obligations (upon which payments are conditioned), a CIP program can pay as much or more than a compensation scheme would. But, unlike in a compensation scheme, under a CIP program, people get paid for taking pro-conservation actions and/or achieving pro-conservation results, even if they suffer no livestock losses. Accordingly, under a CIP program, the more people can minimize carnivore attacks, the more they can profit off the program. That is, if they can minimize attacks, their payments stay the same but their losses go down. Under a compensation scheme, by contrast, there is no opportunity for profit; the most people can hope for is to recoup their losses from carnivore attacks. This incentivize to minimize losses is critical. With an initial goodwill payment made under a CIP program, communities can invest in resources to help limit carnivore attacks.  Fewer attacks means more profit, thus creating a positive cycle for people and wildlife.

Of course, there are serious challenges associated with the use of CIPs, including determining how to set ecologically meaningful and achievable targets, how to measure a community’s performance, how to ensure that payments are equitably distributed, and how to resolve disputes under such a program, among others. And, even if these challenges can be met, CIPs should not be expected to be stand-alone, silver-bullet solutions to conservation problems that are often complex and motivated by more than just financial concerns.

However, given the potential of CIPs to deliver significant benefits for both people and wildlife, they are likely to be an important conservation tool going forward. Recognizing that local communities should not unfairly bear the costs of conserving carnivores is a critical development in mitigating human-carnivore conflicts. Implementing programs that effectively incentivize and reward community efforts is the next step.

%d bloggers like this: