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This study analyzes the willingness of farmers to accept payments for ecosystem services in the Paraíba do Sul River basin applying a contingent valuation methodology. Ecosystem services would be those resulting from forest conservation and regeneration and sustainable and innovative production practices. The results suggest a regressive bias when some variables that capture the income effect positively affect participation in the program and acceptance of the payment offered. There is also evidence of adverse selection when acceptance of the amount offered is more sensitive to the service provision already being suited to the modes of production adopted. The results, on the other hand, indicate that farmers' decisions to join the program depend not only on their opportunity costs, but also on their perceptions about specific issues, such as their environmental knowledge or awareness, inertia to change production modes, fear of additional monitoring, and level of understanding of the program. These results are important to support the program's outreach strategies and the design of mechanisms for the selection of beneficiaries and pricing of payments. [ABSTRACT FROM AUTHOR]

We present the results of a contingent valuation study aimed at estimating the monetary value of environmental and cultural/heritage injuries caused by the Fundão (tailings) Dam failure in Brazil in 2015 as perceived by the Brazilian population. While the valuation literature on mining-related externalities is considerable, valuation studies of environmental and cultural/heritage injuries resulting from mining incidents are scarce and most available damage assessments apply market valuation methods, while rarely considering environmental and other nonmarket-valued impacts. The flooding and the release of tailings from the Fundão Dam failure led to injuries to sediments, watercourse opacity, and oxygenation, changes in riparian morphology, damages to cultural/heritage resources, mortality to fish and wildlife, changes in the food chain and more along the 675 km watercourse of the Doce River. This was arguably the greatest environmental and cultural/heritage injury ever caused by a single tailings dam collapse. The study followed state-of-the-art recommendations for the development, administration, and data analysis of stated-preference valuation methods. The survey of a representative sample of 5195 Brazilian urban households revealed that the average lower-bound willingness-to-pay estimate to avoid a similar incident in the near future was 137 USD and the parametric-based estimate was 230 USD per household, which aggregates to 7.96 or 12.91 billion USD, respectively. This corresponds to environmental damages of 176 or 295 USD per m3 of tailings released. [ABSTRACT FROM AUTHOR]

Summary This paper investigates the effects of political (mis)alignment on public service delivery when mandates are shared between state and local governments. We analyze local sewage treatment policies in the state of São Paulo, Brazil. The Brazilian Constitution divides the mandates related to the control of water pollution. It gives the mayors of municipalities the control of local sanitation services while the governor of the state of São Paulo is responsible for the quality of water bodies (watersheds and rivers). As a result, the state government and municipalities have conflicting objectives. The former is committed to water environmental protection while the latter do not internalize the externalities associated with dumping raw sewage that affect neighboring municipalities. In this paper, we argue that informal arrangements between state and local authorities play a key role in addressing this principal–agent problem or moral hazard issue. Given that constitutional debates have failed to set up a regulatory framework, the de facto solution is a more informal type of regulation anchored in the political leverage of the governor. In particular, the hierarchy within a political party allows the governor to provide aligned mayors with tailored incentives to improve local sanitation infrastructure. As a result, aligned municipalities should, on average, allocate more resources to sewage treatment. Relying on difference-in-differences estimations, we establish a causal relationship between political alignment and higher sewage treatment provision. We find that sewage treatment provision is between 18% and 46% higher in municipalities in which the mayor is aligned with the governor of the state of São Paulo. [ABSTRACT FROM AUTHOR]