Speaker: Rohini Pande, Yale University
Title Money (Not) to Burn: Payments for Ecosystem Services to Reduce Crop Residue Burning

Abstract 

Particulate matter reduces life expectancy across India. We use a randomized con-trolled trial in the Indian state of Punjab to evaluate the effectiveness of conditionalcash transfers (also known as payments for ecosystem services, or PES) in reducingcrop residue burning, which is a major contributor to the region’s poor air quality.Credit constraints and distrust may make farmers less likely to comply with standardPES contracts, which only pay farmers after verification of compliance. We randomizepaying a portion upfront and unconditionally. We observe high contract take-up forboth types of contracts. Despite lower compliance incentives, farmers offered partialupfront payment are 8-11 percentage points more likely to comply with the contract,significantly more than farmers who receive the standard contract. Non-burning mea-sures derived from satellite imagery indicate that while upfront PES payments reducedoverall burning, standard PES payments were infra-marginal. We also show that, giventhe Indian context, conditional cash transfers to farmers that have an upfront compo-nent are a cost-effective way to improve India’s air quality.