Assessing Preferences for Compensation Packages Using the Discrete Choice Method: The Case of the Bolsa Floresta Program in Amazonas, Brazil

Abstract

Natural ecosystems, including forest ecosystems, continue to be degraded or converted at an alarming rate. To complement or substitute regulatory approaches to ecosystem management, market-based instruments such as "payments for ecosystem services" (PES) have been introduced and are gaining popularity. One of the prominent PES schemes in the world is the Bolsa Floresta Program (BFP) in the State of Amazonas, Brazil. The BFP was established by the Government of the State of Amazonas through its Secretariat for Environment and Sustainable Development in 2006 and is implemented by the Amazonas Sustainable Foundation. The BFP, which is a voluntary program to reduce deforestation and promote sustainable development by rewarding the communities for changing their land use practices, has four main components: the Bolsa Floresta Income; Bolsa Floresta Social; Bolsa Floresta Family; and Bolsa Floresta Association. A study was conducted to assess the preferences of the participating households in three reserves, namely: Rio Negro, Juma, and Uatumã, for different payment packages with varying combinations of the bolsas relative to the status quo option. The discrete choice method and an open ended question format were used to elicit the preferences of the participant households. The discrete choice model results showed that the majority of the respondents (about 80 per

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