Economic Valuation of Natural Resources in the Amazonian Region of Peru: Green Growth to achieve Sustainable Development

Abstract

This thesis aims to constitute a building block for a consistent and permanent link between economy and environment through the introduction of natural capital to Gross Domestic Product (GDP), in order to have a better understanding of the sustainability of a country. This PhD thesis analyses the environmental, economic, and social context of indigenous communities in five Amazonian regions of Peru: 1. Amazonas, 2. Loreto, 3. Madre de Dios, 4. Ucayali, and 5. San Martín, in order to identify the main environmental threats. Based on the assessment of different economic valuation methods and ecosystem services, this research merges the reality observed in the indigenous communities with a critique of the literature on environment and economy to build an efficient tool that could analyse and monitor the environmental trends and economic costs produced by the most relevant ecosystem service for the regions, in this case, carbon storage. Therefore, this thesis focuses on including a green economic indicator related to the cost of carbon emissions into regional GDP through the economic valuation of carbon storage using the Social Cost of Carbon. This research develops an alternative scenario under current international carbon market prices to measure the potential impact of carbon credits for the selected five Amazonian regions of Peru. Considering the economic relevance for regional and national economy, this research analyses the regional GDP structure to include the cost of carbon emissions to provide a clearer state of regional economic sustainability. Finally, this thesis explores the implementation of Payment for Ecosystem Services (PES) schemes and analyses the risks and barriers through the assessment of PES programs implemented in the Latin American region. After determining the monetary value of carbon stocks, and taking into consideration the social perceptions of development, it was possible to incorporate the economic value of carbon cost into regional GDP, highlighting not only the environmental aspect of the selected ecosystem service provided by the Amazonian tropical forest, but also the economic and social relevance for the regions in particular, and the country in general. As a result, it was possible to highlight the importance of natural capital, and the economic viability of the implementation of environmentally-friendly strategies such as the development of conservation projects that could increase the environmental quality and maintain the amount of carbon in forests, especially in highly vulnerable regions such as the Amazonian forest.