IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v164y2021i3d10.1007_s10584-021-03016-0.html
   My bibliography  Save this article

Achieving the climate goal with intergovernmental transfers to the forestry sector: insights from the Indian experience

Author

Listed:
  • Purnamita Dasgupta

    (Institute of Economic Growth
    International Centre for Integrated Mountain Development)

  • Kavitha Srikanth

    (Institute of Economic Growth)

Abstract

Forests play an important role in both mitigation and adaptation to climate change. India is amongst a select group of countries that have experimented with intergovernmental fiscal transfers to support forest conservation. Well-designed transfers have important implications for the achievement of national and international commitments for forest conservation, the well-being of communities and climate mitigation. A substantial amount, USD 51 billion was allocated for devolution from the Union (Government of India) to the subnational (state) governments against the forest cover criteria for the period 2015–2019. Evidence indicates that this substantial devolution did not guarantee fund flows to the forestry sector nor result in an appreciable increase in conservation outcomes in states that benefited the most from the transfers. We conduct an in-depth empirical analysis which demonstrates that the design of the transfer is crucial in determining outcomes. Findings indicate that conservation and afforestation outcomes are likely to be better when the ecological values, the bulk of which are carbon values, are incorporated upfront in financial allocation decisions. Indirectly incentivizing subnational entities by compensating them for maintaining land under forests is a much weaker approach that may not lead to the desired outcomes. Our findings are relevant since the next phase of allocation through fiscal transfers is under active consideration. Ensuring design compatibility in financial transfers complements and links up well with international goals to achieve climate mitigation through REDD+, as well as domestic priorities for achieving the SDGs.

Suggested Citation

  • Purnamita Dasgupta & Kavitha Srikanth, 2021. "Achieving the climate goal with intergovernmental transfers to the forestry sector: insights from the Indian experience," Climatic Change, Springer, vol. 164(3), pages 1-24, February.
  • Handle: RePEc:spr:climat:v:164:y:2021:i:3:d:10.1007_s10584-021-03016-0
    DOI: 10.1007/s10584-021-03016-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10584-021-03016-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10584-021-03016-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Grieg-Gran, Maryanne, 2000. "Fiscal Incentives for Biodiversity Conservation: The ICMS Ecologico in Brazil," Discussion Papers 24135, International Institute for Environment and Development, Environmental Economics Programme.
    2. Kumar, Surender & Managi, Shunsuke, 2009. "Compensation for environmental services and intergovernmental fiscal transfers: The case of India," Ecological Economics, Elsevier, vol. 68(12), pages 3052-3059, October.
    3. Hajkowicz, Stefan, 2007. "Allocating scarce financial resources across regions for environmental management in Queensland, Australia," Ecological Economics, Elsevier, vol. 61(2-3), pages 208-216, March.
    4. Ickowitz, Amy & Sills, Erin & de Sassi, Claudio, 2017. "Estimating Smallholder Opportunity Costs of REDD+: A Pantropical Analysis from Households to Carbon and Back," World Development, Elsevier, vol. 95(C), pages 15-26.
    5. Micah L. Ingalls & Michael B. Dwyer, 2016. "Missing the forest for the trees? Navigating the trade-offs between mitigation and adaptation under REDD," Climatic Change, Springer, vol. 136(2), pages 353-366, May.
    6. Santos, Rui & Ring, Irene & Antunes, Paula & Clemente, Pedro, 2010. "Fiscal transfers for biodiversity conservation: The Portuguese Local Finances Law," UFZ Discussion Papers 11/2010, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    7. Mumbunan, Sonny & Ring, Irene & Lenk, Thomas, 2012. "Ecological fiscal transfers at the provincial level in Indonesia," UFZ Discussion Papers 06/2012, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    8. Amy E. Duchelle & Gabriela Simonet & William D. Sunderlin & Sven Wunder, 2018. "What is REDD+ achieving on the ground?," Post-Print hal-02623994, HAL.
    9. Lele, Sharachchandra & Srinivasan, Veena, 2013. "Disaggregated economic impact analysis incorporating ecological and social trade-offs and techno-institutional context: A case from the Western Ghats of India," Ecological Economics, Elsevier, vol. 91(C), pages 98-112.
    10. Maria Fernanda Gebara & Peter H. May & Rachel Carmenta & Bruno Calixto & Maria Brockhaus & Monica Gregorio, 2017. "Framing REDD+ in the Brazilian national media: how discourses evolved amid global negotiation uncertainties," Climatic Change, Springer, vol. 141(2), pages 213-226, March.
    11. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    12. Pinho, Patricia Fernanda & Patenaude, Genevieve & Ometto, Jean P & Meir, Patrick & Toledo, Peter M & Coelho, Andrea & Young, Carlos Eduardo Frickmann, 2014. "Ecosystem protection and poverty alleviation in the tropics: Perspective from a historical evolution of policy-making in the Brazilian Amazon," Ecosystem Services, Elsevier, vol. 8(C), pages 97-109.
    13. Meenakshi Kaul & G. Mohren & V. Dadhwal, 2011. "Phytomass carbon pool of trees and forests in India," Climatic Change, Springer, vol. 108(1), pages 243-259, September.
    14. Lele, Sharachchandra, 2019. "Understanding Current Forest Policy Debates through Multiple Lenses: The Case of India," Ecology, Economy and Society - the INSEE Journal, Indian Society of Ecological Economics (INSEE), vol. 2(02), July.
    15. Lauren Gifford, 2020. "“You can’t value what you can’t measure”: a critical look at forest carbon accounting," Climatic Change, Springer, vol. 161(2), pages 291-306, July.
    16. Dunford, Rob & Harrison, Paula & Smith, Alison & Dick, Jan & Barton, David N. & Martin-Lopez, Berta & Kelemen, Ezsther & Jacobs, Sander & Saarikoski, Heli & Turkelboom, Francis & Verheyden, Wim & Hauc, 2018. "Integrating methods for ecosystem service assessment: Experiences from real world situations," Ecosystem Services, Elsevier, vol. 29(PC), pages 499-514.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fernanda Andrade de Xavier & Pranab Mukhopadhyay, 2023. "Can Fiscal Transfers Help India Meet Its SDG Goals?," South Asian Journal of Macroeconomics and Public Finance, , vol. 12(2), pages 218-249, December.
    2. Jonah Busch & Irene Ring & Monique Akullo & Oyut Amarjargal & Maud Borie & Rodrigo S. Cassola & Annabelle Cruz-Trinidad & Nils Droste & Joko Tri Haryanto & Ulan Kasymov & Nataliia Viktorivna Kotenko &, 2021. "A global review of ecological fiscal transfers," Nature Sustainability, Nature, vol. 4(9), pages 756-765, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jonah Busch & Irene Ring & Monique Akullo & Oyut Amarjargal & Maud Borie & Rodrigo S. Cassola & Annabelle Cruz-Trinidad & Nils Droste & Joko Tri Haryanto & Ulan Kasymov & Nataliia Viktorivna Kotenko &, 2021. "A global review of ecological fiscal transfers," Nature Sustainability, Nature, vol. 4(9), pages 756-765, September.
    2. Mumbunan, Sonny & Ring, Irene & Lenk, Thomas, 2012. "Ecological fiscal transfers at the provincial level in Indonesia," UFZ Discussion Papers 06/2012, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    3. Sauquet, Alexandre & Marchand, Sébastien & Féres, José Gustavo, 2014. "Protected areas, local governments, and strategic interactions: The case of the ICMS-Ecológico in the Brazilian state of Paraná," Ecological Economics, Elsevier, vol. 107(C), pages 249-258.
    4. Farley, Josh & Aquino, André & Daniels, Amy & Moulaert, Azur & Lee, Dan & Krause, Abby, 2010. "Global mechanisms for sustaining and enhancing PES schemes," Ecological Economics, Elsevier, vol. 69(11), pages 2075-2084, September.
    5. Alexandre Sauquet & Sébastien Marchand & José Gustavo Feres, 2012. "Ecological Fiscal Incentives and Spatial Strategic Interactions: the Case of the ICMS-E in the Brazilian state of Paraná," CERDI Working papers halshs-00700474, HAL.
    6. Nils Droste & Claudia Becker & Irene Ring & Rui Santos, 2018. "Decentralization Effects in Ecological Fiscal Transfers: A Bayesian Structural Time Series Analysis for Portugal," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(4), pages 1027-1051, December.
    7. Droste, N. & Ring, I. & Santos, R. & Kettunen, M., 2018. "Ecological Fiscal Transfers in Europe – Evidence-Based Design Options for a Transnational Scheme," Ecological Economics, Elsevier, vol. 147(C), pages 373-382.
    8. Aggarwal, Ashish & Brockington, Dan, 2020. "Reducing or creating poverty? Analyzing livelihood impacts of forest carbon projects with evidence from India," Land Use Policy, Elsevier, vol. 95(C).
    9. West, Thales A.P. & Grogan, Kelly A. & Swisher, Marilyn E. & Caviglia-Harris, Jill L. & Sills, Erin O. & Roberts, Dar A. & Harris, Daniel & Putz, Francis E., 2018. "Impacts of REDD+ payments on a coupled human-natural system in Amazonia," Ecosystem Services, Elsevier, vol. 33(PA), pages 68-76.
    10. Ranjan, Ram, 2021. "Land use decisions under REDD+ incentives when warming temperatures affect crop productivity and forest biomass growth rates," Land Use Policy, Elsevier, vol. 108(C).
    11. Clément de Chaisemartin & Jaime Ramirez-Cuellar, 2024. "At What Level Should One Cluster Standard Errors in Paired and Small-Strata Experiments?," American Economic Journal: Applied Economics, American Economic Association, vol. 16(1), pages 193-212, January.
    12. Yuheng Lin & Dooruj Rambaccussing & Yu Zhu, 2024. "The impact of international students in the UK on the cultural goods trade," French Stata Users' Group Meetings 2024 29, Stata Users Group.
    13. Friedrich, Sarah & Pauly, Markus, 2018. "MATS: Inference for potentially singular and heteroscedastic MANOVA," Journal of Multivariate Analysis, Elsevier, vol. 165(C), pages 166-179.
    14. Borisova, Ekaterina & Gründler, Klaus & Hackenberger, Armin & Harter, Anina & Potrafke, Niklas & Schoors, Koen, 2023. "Crisis experience and the deep roots of COVID-19 vaccination preferences," European Economic Review, Elsevier, vol. 160(C).
    15. Berthélemy Michel & Bonev Petyo & Dussaux Damien & Söderberg Magnus, 2019. "Methods for strengthening a weak instrument in the case of a persistent treatment," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 23(1), pages 1-30, February.
    16. Carrieri, Vincenzo & Madio, Leonardo & Principe, Francesco, 2019. "Light cannabis and organized crime: Evidence from (unintended) liberalization in Italy," European Economic Review, Elsevier, vol. 113(C), pages 63-76.
    17. Jung, Haeil & Kim, Jun Hyung & Hong, Gihyeon, 2023. "Impacts of the COVID-19 crisis on single-person households in South Korea," Journal of Asian Economics, Elsevier, vol. 84(C).
    18. Cain Polidano & Justin van de Ven & Sarah Voitchovsky, 2017. "The Power of Self-Interest: Effects of Education and Training Entitlements in Later-Life," Melbourne Institute Working Paper Series wp2017n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    19. Calomiris, Charles W. & Larrain, Mauricio & Schmukler, Sergio L., 2021. "Capital inflows, equity issuance activity, and corporate investment," Journal of Financial Intermediation, Elsevier, vol. 46(C).
    20. Jorge Cuartas, 2017. "Neighborhood Crime Undermines Parenting: Violence in the Vicinity of Households as a Predictor of Aggressive Discipline," Documentos de trabajo 17646, Escuela de Gobierno - Universidad de los Andes.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:164:y:2021:i:3:d:10.1007_s10584-021-03016-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.