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The REDD scheme to curb deforestation: A well-designed system of incentives?

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Author Info

  • Charles Figuières
  • Solenn Leplay
  • Estelle Midler
  • Sophie Thoyer

Abstract

Bioprospection is, largely, meant to help reducing deforestation and, the other way around, stopping deforestation enhances the prospects of bioprospection. The need for a global agreement to the problem of tropical deforestation has led to the REDD (Reducing Emissions from Deforestation and Degradation) scheme, which proposes that developed countries pay developing countries for CO2 emissions saved through avoided deforestation and degradation. The remaining issue at stake is to definer the rules defning payments to countries reducing their deforestation rate. This article develops a game-theoretic bargaining model, simulating the on-going negotiation process which is currently taking place within the Convention of Climate Change, after the Copenhagen agreement of December 2009. It shows that the conditions under which developing countries are left to bargain over the allocation of the global forest fund may lead to an ineffective system of incentives. Below a given level of contributions from the North, the mechanism fails to curb the deforestation. Beyond this level, it induces perverse effects: the larger the North's contribution, the larger the deforestation rate. Consequently, the mechanism is most effective only at a specifc threshold level which, given the unobservability of countries'preferences, can only be found by a repeated "trial and error" implementation process.

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File URL: http://www.lameta.univ-montp1.fr/Documents/DR2010-06.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 10-06.

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Length: 25 pages
Date of creation: Jun 2010
Date of revision: Jun 2010
Handle: RePEc:lam:wpaper:10-06

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  1. Rupert Gatti & Timo Goeschl & Ben Groom & Timothy Swanson, 2011. "The Biodiversity Bargaining Problem," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(4), pages 609-628, April.
  2. Scott Barrett, 1994. "The biodiversity supergame," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(1), pages 111-122, February.
  3. Tacconi, Luca, 2009. "Compensated successful efforts for avoided deforestation vs compensated reductions," Ecological Economics, Elsevier, vol. 68(8-9), pages 2469-2472, June.
  4. Koop, Gary & Tole, Lise, 1999. "Is there an environmental Kuznets curve for deforestation?," Journal of Development Economics, Elsevier, vol. 58(1), pages 231-244, February.
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Cited by:
  1. Mireille Chiroleu-Assouline & Jean-Christophe Poudou & Sébastien Roussel, 2012. "North / South Contractual Design through the REDD+ Scheme," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00747405, HAL.

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