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REDD+ and international leakage via food and timber markets: a CGE analysis

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  • Onno Kuik

Abstract

This paper studies the effect of international trade in food and timber on land use and potential carbon leakage in the context of actions to reduce emissions from deforestation and forest degradation (REDD+). First a simple analytical model of international leakage is presented that focuses on international competition between firms that produce food and timber. A formula for the leakage rate in the model is derived. The results of the analytical model are then tested with a large Computable General Equilibrium (CGE) model and it is verified that the qualitative results from the analytical model hold. Finally, a scenario of leakage rate trajectories is presented for a number of key tropical forest regions for the next two decades and a sensitivity analysis is performed on key parameters. Computed leakage rates range between 0.5 % for Brazil and 11.3 % for Malaysia and are fairly stable over the projection period. Leakage rates increase with a higher supply elasticity of land and a higher trade elasticity, they decrease with a higher elasticity of input substitution in production and appear to be independent of the rates of forest conservation and absolute prices of food and timber. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Onno Kuik, 2014. "REDD+ and international leakage via food and timber markets: a CGE analysis," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(6), pages 641-655, August.
  • Handle: RePEc:spr:masfgc:v:19:y:2014:i:6:p:641-655
    DOI: 10.1007/s11027-013-9527-2
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    Cited by:

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    2. Sheng, Jichuan, 2020. "Private sector participation and incentive coordination of actors in REDD+," Forest Policy and Economics, Elsevier, vol. 118(C).
    3. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117928, London School of Economics and Political Science, LSE Library.
    4. Pan, Wenqi & Kim, Man-Keun & Ning, Zhuo & Yang, Hongqiang, 2020. "Carbon leakage in energy/forest sectors and climate policy implications using meta-analysis," Forest Policy and Economics, Elsevier, vol. 115(C).
    5. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117927, London School of Economics and Political Science, LSE Library.
    6. García, Jorge H. & Orlov, Anton & Aaheim, Asbjørn, 2018. "Negative leakage: The key role of forest management regimes," Journal of Forest Economics, Elsevier, vol. 33(C), pages 8-13.
    7. Robin Matthews & Meine Noordwijk & Eric Lambin & Patrick Meyfroidt & Joyeeta Gupta & Louis Verchot & Kristell Hergoualc’h & Edzo Veldkamp, 2014. "Implementing REDD+ (Reducing Emissions from Deforestation and Degradation): evidence on governance, evaluation and impacts from the REDD-ALERT project," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(6), pages 907-925, August.
    8. Wei Li & Zhijie Jia, 2017. "Carbon tax, emission trading, or the mixed policy: which is the most effective strategy for climate change mitigation in China?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(6), pages 973-992, August.

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    More about this item

    Keywords

    REDD+; Carbon-leakage; Deforestation; Trade and the environment; iLUC; F18; Q23; Q27; Q56;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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