Livelihood impacts of climate change mitigation and adaptation: evaluating an incentive-based forest carbon management scheme in Bolivia

Publication Details

3ie Funded Evaluation, DPW1.1088. A link to the completed study will appear here when available.

Nigel Asquith, Sandro Diez Amigo, Tara Grillos, Kelsey Jack, Andrea Markos, Tito Vidaurre
Latin America and the Caribbean
Environment and Disaster Management
None specified
Gender analysis
Equity Focus
None specified
Evaluation design
Regression Discontinuity Design (RDD)
Ongoing 3ie Funded Studies
3ie Funding Window
Development Priorities Window 1


The evaluation will assess the effectiveness of communal compensation contracts and explore the impact of decision-making processes used to select the form of compensation.


Payments for environmental services (PES) are conditional cash transfers to the providers of environmental services (such as upstream forest owners). While a number of studies have investigated the effectiveness of individual-level PES contracts, less is known about the PES model applied to communally owned land. Group-level payments have added complexities: both the dynamics of the group and the processes through which group decision making is facilitated may affect outcomes. For instance, in a context where land is communally owned, compensations could take the form of development projects that benefit the entire community as a whole.

This evaluation will enable better understanding of group participation and decision-making processes to the overall effectiveness of communal PES schemes.

Research questions

  1. Are communal land compensation contracts effective at improving conservation behaviour?
  2. Does the use of participatory decision-making help to improve these outcomes within the treatment group, and if so, why?


Intervention design

The ‘Watershared’ model was developed by the Natura Bolivia Foundation and has been implemented in the Andean foothills of Bolivia since 2003. This region comprises of individual landowners with strong community traditions. Watershared initiatives are locally implemented, promote and build on social norms and rely on in-kind payments in the form of inputs and training in income-generating activities.

Fundación Natura Bolivia and seven municipal governments are working to import the model to the Gran Chaco region since late 2016. However, this region is drier, inhabited predominantly by indigenous Guaraní communities and governed by communal land systems. The Watershared model will be tailored to this context, where land is communally owned and compensations must take the form of development projects that benefit the entire community.

Theory of change

The Watershared model uses contributions from downstream water consumers to support development projects upstream. This allows upstream farmers to sequester carbon by protecting their forests. With upstream forests protected, downstream areas receive less flooding and sedimentation, and better water quality and quantity, which will in turn help improve downstream living conditions. As a result, one can expect significant positive impacts in incomes for both upstream and downstream farmers.

In a context of communally owned land some of the important assumptions underlying the theory of change are: 1) downstream users value watershed services and are willing to provide compensation for upstream land management; 2) upstream communities are currently engaged in land use practices that contribute to poor water quality downstream; 3) upstream communities are able to make collective decisions about land use practices that can be internally enforced; 4) collective decisions about land use practices are affected by the incentives, norms and alternatives surrounding land use decisions.

Evaluation design

This evaluation uses a randomised control trial design among 150 eligible communities in seven Gran Chaco municipalities. 100 communities will be randomly selected through a public lottery to be offered the Watershared model. The remaining 50 communities will serve as a control group. To investigate how the communal land model can be made more cost-effective, these 100 treatment communities will be further subdivided into two groups: 50 communities will receive the ‘community choice’ compensation and 50 communities will receive an ‘external choice’ compensation. In particular, in the community choice treatment, the form of compensation will be determined through a deliberative community decision-making process. External choice treatment communities will be offered a single type of compensation (either fruit or honey production packages).

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