1. Cost efficiency of smallholder payment for ecosystem services (PES) scheme in rural Kenya Emmanuel Olatunbosun Benjamin and Johannes Sauer Technische Universität München, Germany
Outline
Introduction
Theoretical Framework
Empirical Research
Conclusion
Reference

2. Payments for Ecosystem Services (Agroforestry)
INTRODUCTION
Ecosystem Services (Agroforestry)
Provision services
Contribute to Nutrition  Food
Supporting services
Interactions between agriculture output and ecosystem services Soil fertility
Regulating services
Contribute to ecosystem cycle  Carbon sequestration
Cultural services
Contribute to culture, belief and recreation  Heritage value
Payments for Ecosystem Services (Agroforestry)
Introduction → Theoretical framework →Empirical research → Conclusion

3.  Competitive, Complementary and Supplementary in Nature
INTRODUCTION
Supporting services (Non-marketed output)
Product (agriculture output) – Product (ecosystem services) Relationship
 Competitive, Complementary and Supplementary in Nature
How to evaluate the adequate level of PES compensation
How to evaluate the cost efficiency of PES scheme
Supporting services
Introduction → Theoretical framework →Empirical research → Conclusion

4. Theoretical framework
Production possibility frontier and the opportunity cost of ES provision
Introduction → Theoretical framework →Empirical research → Conclusion

5. Theoretical framework
Production possibility frontier and the opportunity cost of ES provision
Introduction → Theoretical framework →Empirical research → Conclusion

6. Theoretical framework
Production possibility frontier and the opportunity cost of ES provision
Introduction → Theoretical framework →Empirical research → Conclusion

7. Theoretical framework
Transformation function: Heckman two stage selection
(Output producible (incl. PES) from given input and conditions - Participants in PES)
(Decision to participation in PES)
Farm production structure:
(1st order elasticities of the transformation function (1)= production possibility frontier)
(2nd order elasticities of the transformation function (1) = check the consistency of PPF)
Introduction → Theoretical framework →Empirical research → Conclusion

8. Theoretical framework
Extra output produced by one more unit of input – Direct effect
Extra output produced by one more unit of Ecosystem services – Direct effect
Indirect effect of changes in Ecosystem services and input on Output
Introduction → Theoretical framework →Empirical research → Conclusion

9. Empirical research
The international small group tree planting program (TIST)
(Embu, Meru and Nanyuki)
Planted over 7.5 million trees in 2000 villages
Sequestrated over 209,613 tons (2012)
PES is US$ 0.02 (ca Kenyan Shilling -Ksh) per trees
Introduction → Theoretical framework →Empirical research → Conclusion

10. Empirical research
First order elasticities at the sample mean - Farm production structure
Introduction → Theoretical framework →Empirical research → Conclusion

11. Empirical research
Descriptive Statistics for Direct and Indirect Effects
Introduction → Theoretical framework →Empirical research → Conclusion

12. Empirical research Observations Per Product-Product Relationship
Introduction → Theoretical framework →Empirical research → Conclusion

13. Conclusion
The majority of TIST farms have supplementary product-product relationship
Increase of ecosystem on TIST farms is possible without reducing output.
Current PES may not reflect the true opportunity cost in the supplementary cases
More research in estimating the cost efficiency of agroforestry conservation programs.
Introduction → Theoretical framework → Empirical research → Conclusion

14. THANKS FOR YOUR ATTENTION