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Growth, deforestation and the efficiency of the REDD mechanism

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  • Helene Ollivier

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper assesses the long term impacts of an international transfer called the Reduced Emissions from Deforestation and Degradation (REDD) mechanism, which aims at preserving tropical forests of the recipient economy. This two-sector economy faces a dilemma between economic growth and deforestation. The rural sector can substitute reproducible capital for agricultural land whereas the manufacturing sector only requires capital. The model shows that the REDD mechanism has a non-monotonic effect on steady state welfares. For low transfer schemes, the agricultural output increases with the transfer even though less land is under cultivation. For high transfer schemes, the increase in the transfer may not offset the decrease in the agricultural output. The open-loop symmetric Nash equilibrium in a dynamic deforestation game predicts that redistributing the transfer among a finite number of producers is less efficient in reducing deforestation than in the social optimum.

Suggested Citation

  • Helene Ollivier, 2012. "Growth, deforestation and the efficiency of the REDD mechanism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00750718, HAL.
  • Handle: RePEc:hal:cesptp:hal-00750718
    DOI: 10.1016/j.jeem.2012.07.007
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00750718
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Andersen, Lykke E. & Groom, Ben & Killick, Evan & Ledezma, Juan Carlos & Palmer, Charles & Weinhold, Diana, 2017. "Modelling Land Use, Deforestation, and Policy: A Hybrid Optimisation-Heterogeneous Agent Model with Application to the Bolivian Amazon," Ecological Economics, Elsevier, vol. 135(C), pages 76-90.
    2. Barbier, Edward B. & Tesfaw, Anteneh, 2015. "Explaining forest transitions: The role of governance," Ecological Economics, Elsevier, vol. 119(C), pages 252-261.
    3. Laing, Timothy & Palmer, Charles, 2015. "Economy-wide impacts of REDD when there is political influence," Resource and Energy Economics, Elsevier, vol. 40(C), pages 107-126.
    4. Patrick Doupe, 2014. "Reduced Deforestation and Economic Growth," CCEP Working Papers 1402, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
    5. repec:eee:resene:v:51:y:2018:i:c:p:1-17 is not listed on IDEAS
    6. 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.
    7. Agbo, Maxime, 2014. "Strategic exploitation with learning and heterogeneous beliefs," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 126-140.
    8. Alix-Garcia, Jennifer & Wolff, Hendrik, 2014. "Payment for Ecosystem Services from Forests," IZA Discussion Papers 8179, Institute for the Study of Labor (IZA).
    9. Lucas Bretschger & Alexandra Vinogradova, 2016. "Preservation of Agricultural Soils with Endogenous Stochastic Degradation," CER-ETH Economics working paper series 16/232, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    10. Doupe, Patrick, 2014. "Reduced deforestation and economic growth," Working Papers 249421, Australian National University, Centre for Climate Economics & Policy.
    11. Hübler, Michael, 2015. "How Tourism Can Save Nature," Hannover Economic Papers (HEP) dp-551, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    12. Edward Barbier & Philippe Delacote & Julien Wolfersberger, 2016. "The economic analysis of the forest transition," Working Papers 1605, Chaire Economie du climat.

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    Keywords

    Avoided deforestation; Growth; Aid efficiency;

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