Does Eco-Certification Have Environmental Benefits? Organic Coffee in Costa Rica

Eco-certification of coffee, timber and other high-value agricultural commodities is increasingly widespread. In principle, it can improve commodity producers’ environmental performance, even in countries where state regulation is weak. However, evidence needed to evaluate this hypothesis is virtually nonexistent. To help fill this gap, we use detailed farm-level data to analyze the environmental impacts of organic coffee certification in central Costa Rica. We use propensity score matching to control for self-selection bias. We find that organic certification improves coffee growers’ environmental performance. It significantly reduces chemical input use and increases adoption of some environmentally friendly management practices.

Most coffee farms in developing countries contribute to water pollution, soil erosion, and tree cover loss. Eco-certification of coffee farms promises to mitigate these damages. In theory, price premiums for certified coffee can create powerful incentives for growers to improve environmental performance. Yet very little empirical evidence exists to confirm or refute this hypothesis. In fact, the handful of studies to date suggests that it often does not hold because already-clean growers disproportionately self-select into certification.

However, in a new RFF Discussion Paper, “Does Eco-Certification Have Environmental Benefits? Organic Coffee in Costa Rica,” Allen Blackman and Maria Naranjo present results from a study that suggest organic coffee certification can improve growers’ environmental performance. Specifically, they find it results in significant cuts in agrochemical use and increases in organic fertilizer use.

These results are partly explained by the geographical and institutional context for the study. The authors assess coffee production in central Costa Rica, where coffee is highly “technified” and few growers already meet certification standards. Additionally, organic standards are stringent and well-enforced.

Excerpts From The Paper

“We have used detailed cross-sectional data on more than 2,600 coffee farms in central Costa Rica to identify the environmental impacts of organic coffee certification. We have used propensity score matching techniques to control for self-selection bias. Our findings suggest that certification significantly reduces use of all three chemical inputs for which we have data—pesticides, chemical fertilizers, and herbicides—and increases adoption of at least one of the four environmentally friendly management practices for which we have data—organic fertilizer.

“Our findings contrast with those from the only three methodologically rigorous studies of commodity certification environmental impacts, all of which find that eco-certification has no causal effects.