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How (not) to pay — Field experimental evidence on the design of REDD+ payments

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  • Reutemann, Tim
  • Engel, Stefanie
  • Pareja, Eliana

Abstract

Payments for Ecosystem Services (PES) can use many design features. We investigate the impact of payment conditionality types, i.e. different specifications when to pay and when not to pay, for PES on deforestation and agricultural production in a lab-in-the-field experiment. Our experiment also tests variations in contract period and payment volatility. We designed a highly visual simulation game to characterize the decision situation of a cattle rancher in Brazil. The player can expand extensive pasture by deforestation or intensify existing pasture. The model includes both a land and a capital constraint. We applied the game in an economic, framed lab-in-the-field experiment in Tocantins, Brazil. Payments conditional on forest carbon stock lead to slow, but steady deforestation, while payments conditional on forest carbon stock-change suppressed deforestation more strongly. But payments conditional on stock increase cattle production while payments conditional on stock-change have no effect on production. Thus, depending on the level of leakage, either type of conditionality can be more cost-effective in reducing global carbon emissions. Contracts with limited periods lead to strong deforestation after the end of the payment period. Payment volatility had no significant effect.

Suggested Citation

  • Reutemann, Tim & Engel, Stefanie & Pareja, Eliana, 2016. "How (not) to pay — Field experimental evidence on the design of REDD+ payments," Ecological Economics, Elsevier, vol. 129(C), pages 220-229.
  • Handle: RePEc:eee:ecolec:v:129:y:2016:i:c:p:220-229
    DOI: 10.1016/j.ecolecon.2016.05.020
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    References listed on IDEAS

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    Cited by:

    1. Rommel, Jens & Anggraini, Eva, 2018. "Spatially explicit framed field experiments on ecosystem services governance," Ecosystem Services, Elsevier, vol. 34(PB), pages 201-205.
    2. Appel, Franziska & Balmann, Alfons & Dong, Changxing & Rommel, Jens, 2018. "FarmAgriPoliS: An agricultural business management game for behavioral experiments, teaching, and gaming," IAMO Discussion Papers 271455, Institute of Agricultural Development in Transition Economies (IAMO).
    3. Piffer Salles, Guilherme & Paiva Salinas, Delhi Teresa & Paulino, Sônia Regina, 2017. "How Funding Source Influences the Form of REDD+ Initiatives: The Case of Market Versus Public Funds in Brazil," Ecological Economics, Elsevier, vol. 139(C), pages 91-101.
    4. Zabala, Aiora & Pascual, Unai & García-Barrios, Luis, 2017. "Payments for Pioneers? Revisiting the Role of External Rewards for Sustainable Innovation under Heterogeneous Motivations," Ecological Economics, Elsevier, vol. 135(C), pages 234-245.
    5. Appel, F. & Balmann, A., 2018. "Predator or prey? - Effects of fast-growing farms on their neighborhood," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277358, International Association of Agricultural Economists.
    6. Ferré, Marie & Engel, Stefanie & Gsottbauer, Elisabeth, 2018. "Which Agglomeration Payment for a Sustainable Management of Organic Soils in Switzerland? – An Experiment Accounting for Farmers' Cost Heterogeneity," Ecological Economics, Elsevier, vol. 150(C), pages 24-33.
    7. Merlet, Pierre & Van Hecken, Gert & Rodriguez-Fabilena, René, 2018. "Playing before paying? A PES simulation game for assessing power inequalities and motivations in the governance of Ecosystem Services," Ecosystem Services, Elsevier, vol. 34(PB), pages 218-227.
    8. Arriagada, Rodrigo & Villaseñor, Adrián & Rubiano, Eliana & Cotacachi, David & Morrison, Judith, 2018. "Analysing the impacts of PES programmes beyond economic rationale: Perceptions of ecosystem services provision associated to the Mexican case," Ecosystem Services, Elsevier, vol. 29(PA), pages 116-127.
    9. repec:zbw:iamodp:271455 is not listed on IDEAS

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