7. The paper by Shiferaw and his coauthors which was distributed in class on Thursday Oct 13 provides necessary details for which valuation can actually be put into practice. In the paper, the authors introduce different sets of characteristic of ecosystems: starting from production to environmental control role. The authors also differentiate benefit based on the distant (for example, tree growing at the top of the hill helps reduce the magnitude of soil erosion. Therefore, dam downstream benefits from conservation by hill-tribers upstream and these two types of benefit can be referred to as “off-site” (downstream) and “on-site” benefit (when damage soil nutrients are no longer washed out when soil conservation is undertaken).
7.1. When rice farms in Ayutthaya is converted to flood plain. Identify who bears the cost (approximately by how much) and who benefit from such flood plain.
7.2. If as much as 25% water that flooded Ayutthaya, Bangkok and other provinces in 2011 is from the north and if planting trees in the mountains in the north reduce the amount of flood water, then explain how interest of these three groups of people are interrelated: (a) people in the hill, (b) farmers whose land is used for flood protection and (c) beneficiaries of flood protection. When rice farm is inundated, people harm and benefit from it?
7.3. What is “ Hick and Kaldor compensation principle”? How might such principle can be applied here?
7.4. If payment can be collected from those benefiting from flood protection and the money can be used to compensate those who are adversely affected from the program, how such payment system could look like?