Between the Global Commodity Boom and Subnational State Capacities:Payment for Environmental Services to Fight Deforestation inArgentina

Does subnational state capacity stop deforestation? The commodity boom of the2000s significantly expanded the agriculture frontier in most provinces ofArgentina, with devastating effects on native forests. Interestingly, some ofthe subnational governments that presided over the commodities supercycle alsosought to reform the forestry sector to reduce rampant deforestation, despitepromoting and benefiting from agricultural expansion. A national program toprotect native forests through payment for environmental services (PES) wascreated to be implemented in local districts. We argue that the success of newforest protections is contingent on the capacity of subnational governments toimplement the law. In our study, we find that changes in provincialdeforestation rates are explained by the interaction of state capacity, on onehand, and high land prices driven by commodity pressures, on the other. Ourresearch carries implications for students and practitioners of forest PES. Ourfindings underscore the fundamental role subnational state governments play inclimate change mitigation and adaptation.