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Can “fragile states” decide to reduce their deforestation? The inappropriate use of the theory of incentives with respect to the REDD mechanism

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  • Karsenty, Alain
  • Ongolo, Symphorien

Abstract

The originality of the REDD proposal is its incentives-based mechanism designed to reward the governments of developing countries for their performance in reducing deforestation as measured against a baseline. This mechanism is founded on the hypothesis that developing countries ‘pay’ an opportunity cost to conserve their forests and would prefer other choices and convert their wooden lands to other uses. The basic idea is, therefore, to pay rents to these countries to compensate for the anticipated foregone revenues. The reference to the theory of incentives (in its principal–agent version) is implicit but clear. In this REDD-related framework, the Government is taken as any economic agent who behaves rationally i.e. taking decisions after comparing the relative prices associated to various alternatives, then deciding to take action and implementing effective measures to tackle deforestation and shift the nation-wide development path.

Suggested Citation

  • Karsenty, Alain & Ongolo, Symphorien, 2012. "Can “fragile states” decide to reduce their deforestation? The inappropriate use of the theory of incentives with respect to the REDD mechanism," Forest Policy and Economics, Elsevier, vol. 18(C), pages 38-45.
    • Handle: RePEc:eee:forpol:v:18:y:2012:i:c:p:38-45
    DOI: 10.1016/j.forpol.2011.05.006
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    References listed on IDEAS

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