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Unveiling information on opportunity costs in REDD: Who obtains the surplus when policy objectives differ?

Author

Listed:
  • Philippe Delacote

    () (LEF - Laboratoire d'Economie Forestière - Institut national de la recherche agronomique (INRA) - AgroParisTech)

  • Charles Palmer
  • Ryiong Kim Bakkegaard

    (Department of Food and Resource Economics - University of Copenhagen)

  • Bo Jellesmark Thorsen

    (Department of Food and Resource Economics, Centre for Macroecology, Evolution and Climate - University of Copenhagen)

Abstract

Improving information about individual opportunity costs of deforestation agents has the potential to increase the efficiency of REDD when it takes the form of a payment for environmental services scheme. However, objectives pursued in REDD projects may vary across policy makers. Within a theoretical framework, this paper explores the impacts of different policy objectives under two opportunity cost settings: asymmetric and full information. For a policy maker aiming to maximize net income from REDD, having full information may not increase the amount of forest conserved but could lead to a redistribution of rents away from agents. By contrast, for an environmental policy maker focused on maximizing the amount of forest conserved under REDD having full information increases the amount of forest conserved while reducing the rents received by agents. For a policy maker pursuing poverty alleviation objectives in REDD-affected communities, having full information makes no difference to overall welfare as rents remain with agents. The amount of deforestation avoided will at least be as high as under asymmetric information. These results are illustrated with data collected on opportunity costs in Amazonas State, Brazil.

Suggested Citation

  • Philippe Delacote & Charles Palmer & Ryiong Kim Bakkegaard & Bo Jellesmark Thorsen, 2014. "Unveiling information on opportunity costs in REDD: Who obtains the surplus when policy objectives differ?," Post-Print hal-01024447, HAL.
  • Handle: RePEc:hal:journl:hal-01024447
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01024447
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    Cited by:

    1. repec:eee:resene:v:49:y:2017:i:c:p:33-47 is not listed on IDEAS
    2. 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.
    3. repec:spr:masfgc:v:23:y:2018:i:2:d:10.1007_s11027-016-9736-6 is not listed on IDEAS
    4. 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.
    5. Palmer, Charles & Taschini, Luca & Laing, Timothy, 2017. "Getting more ‘carbon bang’ for your ‘buck’ in Acre State, Brazil," Ecological Economics, Elsevier, vol. 142(C), pages 214-227.
    6. Reutemann, Tim & Engel, Stefanie & Pareja, Eliana, 2016. "How (not) to pay — Field experimental evidence on the design of REDD+ payments," Ecological Economics, Elsevier, vol. 129(C), pages 220-229.
    7. repec:kap:enreec:v:69:y:2018:i:1:d:10.1007_s10640-016-0072-9 is not listed on IDEAS

    More about this item

    Keywords

    deforestation; Asymmetric information; Brazil; Opportunity costs; REDD; Payment for environmental services;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • 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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