The effectiveness of market-based conservation in the tropics: forest certification in Ecuador and Bolivia.

During the last decade, forest certification has gained momentum as a market-based conservation strategy in tropical forest countries. Certification has been promoted to enhance forest management in countries where governance capacities are insufficient to adequately manage natural resources and enforce pertinent regulations, given that certification relies largely on non-governmental organisations and private businesses. However, at present there are few tropical countries with large areas of certified forests. In this study, we conducted semi-structured stakeholder interviews in Ecuador and Bolivia to identify key framework conditions that influence the costs and benefits for companies to switch from conventional to certified forestry operations. Bolivia has a much greater relative area under certified forest management than Ecuador and also significantly more certified producers. The difference in the success of certification between both countries is particularly notable because Bolivia is a poorer country with more widespread corruption, and is landlocked with less access to export routes. Despite these factors, several characteristics of the Bolivian forest industry contribute to lower additional costs of certified forest management compared to Ecuador. Bolivia has stronger government enforcement of forestry regulations a fact that increases the cost of illegal logging, management units are larger, and vertical integration in the process chain from timber extraction to markets is higher. Moreover, forestry laws in Bolivia are highly compatible with certification requirements, and the government provides significant tax benefits to certified producers. Results from this study suggest that certification can be successful in countries where governments have limited governance capacity. However, the economic incentives for certification do not only arise from favourable market conditions. Certification is likely to be more successful where governments enforce forestry laws, provide financial incentives for certified forestry, and provide land tenure security, and where large-scale and vertically integrated forestry operations are commercially feasible. For this reason, at present, there are few developing countries where forest certification is likely to achieve widespread success.