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The Economics of International Policy Agreements to Reduce Emissions from Deforestation and Degradation

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  • Suzi C. Kerr

Abstract

This article synthesizes the key conceptual insights from economics for the design of international policies to reduce deforestation and forest degradation and increase reforestation (known as REDD+) as part of the international climate change mitigation effort. Most of the emphasis is on the contribution of economics to the effective design of results-based policies that introduce a price incentive for "strong" states (i.e., those with the institutional capacity to respond effectively to such policies) to address deforestation, degradation, and reforestation. The article also emphasizes how large-scale agreements can minimize leakage and adverse selection, the importance of allocating uncertainty with care, and the need to differentiate clearly among potentially conflicting objectives. It explores the conflicts between cost sharing and efficiency that arise because of private information and the inability of states to make long-term commitments. The article also examines policies that complement price incentives, and, for weak states, policies that can substitute for results-based agreements. (JEL: Q23, Q54, Q56, Q58) Copyright 2013, Oxford University Press.

Suggested Citation

  • Suzi C. Kerr, 2013. "The Economics of International Policy Agreements to Reduce Emissions from Deforestation and Degradation," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 47-66, January.
  • Handle: RePEc:oup:renvpo:v:7:y:2013:i:1:p:47-66
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    Cited by:

    1. Strand, Jon, 2016. "Mitigation incentives with climate finance and treaty options," Energy Economics, Elsevier, vol. 57(C), pages 166-174.
    2. Jacobson, Sarah, 2014. "Temporal spillovers in land conservation," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 366-379.
    3. Gren, Ing-Marie & Zeleke, Abenezer Aklilu, 2016. "Policy design for forest carbon sequestration: A review of the literature," Forest Policy and Economics, Elsevier, vol. 70(C), pages 128-136.
    4. Sims, Katharine R.E. & Alix-Garcia, Jennifer M., 2017. "Parks versus PES: Evaluating direct and incentive-based land conservation in Mexico," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 8-28.
    5. Chiroleu-Assouline, Mireille & Poudou, Jean-Christophe & Roussel, Sébastien, 2018. "Designing REDD+ contracts to resolve additionality issues," Resource and Energy Economics, Elsevier, vol. 51(C), pages 1-17.
    6. Koch, Nicolas & Reuter, Wolf Heinrich & Fuss, Sabine & Grosjean, Godefroy, 2017. "Permits vs. offsets under investment uncertainty," Resource and Energy Economics, Elsevier, vol. 49(C), pages 33-47.
    7. Bård Harstad, 2020. "The Conservation Multiplier," CESifo Working Paper Series 8283, CESifo.
    8. Suzi Kerr & Steffen Lippert & Edmund Lou, 2019. "Financial Transfers and Climate Cooperation," Working Papers 19_04, Motu Economic and Public Policy Research.
    9. Barua, Sepul K. & Lintunen, Jussi & Uusivuori, Jussi & Kuuluvainen, Jari, 2014. "On the economics of tropical deforestation: Carbon credit markets and national policies," Forest Policy and Economics, Elsevier, vol. 47(C), pages 36-45.

    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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