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Supplementing REDD+ with Biodiversity Payments: The Paradox of Paying for Multiple Ecosystem Services

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  • Jonah Busch

Abstract

An international mechanism to reduce emissions from deforestation using carbon payments (REDD+) can be leveraged to make payments for forests’ biodiversity as well. Paradoxically, under conditions consistent with emerging REDD+ programs, money spent on a mixture of carbon payments and biodiversity payments has the potential to incentivize the provision of greater climate benefits than an equal amount of money spent only on carbon payments. This paradoxical result arises when diversifying payments across multiple services allows a funding agency to spend less on additional rents to existing suppliers of avoided deforestation and more on incentivizing the participation of new suppliers.

Suggested Citation

  • Jonah Busch, 2013. "Supplementing REDD+ with Biodiversity Payments: The Paradox of Paying for Multiple Ecosystem Services," Land Economics, University of Wisconsin Press, vol. 89(4), pages 655-675.
    • Handle: RePEc:uwp:landec:v:89:y:2013:iv:1:p:655-675
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    References listed on IDEAS

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    1. Stoneham, Gary & Chaudhri, Vivek & Ha, Arthur & Strappazzon, Loris, 2003. "Auctions for conservation contracts: an empirical examination of Victoria’s BushTender trial," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 1-24.
    2. Bernardo B. N. Strassburg & Ana S. L. Rodrigues & Mykola Gusti & Andrew Balmford & Steffen Fritz & Michael Obersteiner & R. Kerry Turner & Thomas M. Brooks, 2012. "Impacts of incentives to reduce emissions from deforestation on global species extinctions," Nature Climate Change, Nature, vol. 2(5), pages 350-355, May.
    3. Gary Stoneham & Vivek Chaudhri & Arthur Ha & Loris Strappazzon, 2003. "Auctions for conservation contracts: an empirical examination of Victoria's BushTender trial," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 477-500, December.
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    Cited by:

    1. Cacho, Oscar J. & Milne, Sarah & Gonzalez, Ricardo & Tacconi, Luca, 2014. "Benefits and costs of deforestation by smallholders: Implications for forest conservation and climate policy," Ecological Economics, Elsevier, vol. 107(C), pages 321-332.
    2. Gary D. Libecap, 2014. "Addressing Global Environmental Externalities: Transaction Costs Considerations," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 424-479, June.
    3. Marie Hrabanski & Jean-François Le Coq, 2018. "Tackling fragmentation of climate and biodiversity regimes complexes: the role ecosystem services and payment for environmental services : the role ecosystem services and payment for environmental ser," Post-Print hal-02958680, HAL.
    4. Gary D. Libecap, 2013. "Addressing Global Environmental Externalities: Transaction Costs Considerations," NBER Working Papers 19501, National Bureau of Economic Research, Inc.
    5. Uetake, Tetsuya, 2014. "Policy Mixes for the Provision of Agri-environmental Public Goods and Additionality: Some country experiences," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 173041, Agricultural Economics Society.
    6. Mbatu, Richard S, 2016. "REDD+ research: Reviewing the literature, limitations and ways forward," Forest Policy and Economics, Elsevier, vol. 73(C), pages 140-152.

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    More about this item

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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