North / South Contractual Design through the REDD+ Scheme
In this paper we aim at theoretically grounding the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme as a contractual relationship between countries in the light of the theory of incentives. Considering incomplete information about reference levels of deforestation as well as exogenous implementation and transaction costs, we compare two types of contracts : a deforestation performance-based contract and a conditional avoided deforestation-based contract. Because of the implementation and transaction costs, each kind of REDD+ contract implies a dramatically different information rent / efficiency trade-off. If the contract is performance-based (resp. conditionality-based), information rents are awarded to countries with the ex ante lowest (resp. highest) deforestation. In a simple quadratic setting, there is a reference level threshold in terms of efficiency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 33 44 07 81 00
Fax: + 33 1 44 07 83 01
Web page: http://centredeconomiesorbonne.univ-paris1.fr/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Myerson, Roger B, 1979.
"Incentive Compatibility and the Bargaining Problem,"
Econometric Society, vol. 47(1), pages 61-73, January.
- Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Samuelson, William F, 1984. "Bargaining under Asymmetric Information," Econometrica, Econometric Society, vol. 52(4), pages 995-1005, July.
- Hal R. Varian, 1994.
"A Solution to the Problem of Externalities when Agents are Well-Informed},"
- Varian, Hal R, 1994. "A Solution to the Problem of Externalities When Agents Are Well-Informed," American Economic Review, American Economic Association, vol. 84(5), pages 1278-93, December.
- Varian, H,R., 1991. "A Solution to the Problem of Externalities when Agents are Well-Informed," Papers 10, Michigan - Center for Research on Economic & Social Theory.
- Eric Maskin & John G. Riley, 1984.
"Input Versus Output Incentive Schemes,"
UCLA Economics Working Papers
354, UCLA Department of Economics.
- Combes Motel, P. & Pirard, R. & Combes, J.-L., 2009.
"A methodology to estimate impacts of domestic policies on deforestation: Compensated Successful Efforts for "avoided deforestation" (REDD),"
Elsevier, vol. 68(3), pages 680-691, January.
- Romain PIRARD & Pascale COMBES MOTEL & Jean-Louis COMBES, 2008. "A methodology to estimate impacts of domestic policies on deforestation: Compensated Successful Efforts for “avoided deforestation” (REDD)," Working Papers 200805, CERDI.
- Pascale Combes Motel & Romain Pirard & Jean-Louis Combes, 2011. "A methodology to estimate impacts of domestic policies on deforestation: Compensated Successful Efforts for “avoided deforestation” (REDD)," Working Papers halshs-00556933, HAL.
- Solenn Leplay & Jonah Busch & Philippe Delacote & Sophie Thoyer, 2011. "Implementation of national and international REDD mechanism under alternative payments for environemtal services: theory and illustration from Sumatra," Working Papers 11-02, LAMETA, Universtiy of Montpellier, revised Feb 2011.
- Mireille Chiroleu-Assouline & Sébastien Roussel, 2010.
"Contract Design to Sequester Carbon in Agricultural Soils,"
Documents de travail du Centre d'Economie de la Sorbonne
10060, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Mireille Chiroleu-Assouline & Sébastien Roussel, 2010. "Contract Design to Sequester Carbon in Agricultural Soils," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00505137, HAL.
- Mireille CHIROLEU-ASSOULINE & Sébastien ROUSSEL, 2010. "Contract Design to Sequester Carbon in Agricultural Soils," Working Papers 10-07, LAMETA, Universtiy of Montpellier, revised Jul 2010.
- Hannes Öhler & Peter Nunnenkamp & Axel Dreher, 2010.
"Does Conditionality Work? A Test for an Innovative US Aid Scheme,"
Courant Research Centre: Poverty, Equity and Growth - Discussion Papers
34, Courant Research Centre PEG.
- Öhler, Hannes & Nunnenkamp, Peter & Dreher, Axel, 2012. "Does conditionality work? A test for an innovative US aid scheme," European Economic Review, Elsevier, vol. 56(1), pages 138-153.
- Öhler, Hannes & Nunnenkamp, Peter & Dreher, Axel, 2010. "Does conditionality work? A test for an innovative US aid scheme," Center for European, Governance and Economic Development Research Discussion Papers 103, University of Goettingen, Department of Economics.
- Hannes Öhler & Peter Nunnenkamp & Axel Dreher, 2011. "Does Conditionality Work? A Test for an Innovative US Aid Scheme," CESifo Working Paper Series 3454, CESifo Group Munich.
- Hannes Öhler & Peter Nunnenkamp & Axel Dreher, 2010. "Does Conditionality Work? A Test for an Innovative US Aid Scheme," Kiel Working Papers 1630, Kiel Institute for the World Economy.
- Jean Tirole & Jean-Jaques Laffont, 1985.
"Using Cost Observation to Regulate Firms,"
368, Massachusetts Institute of Technology (MIT), Department of Economics.
- Giovanni Maggi & Andres Rodriguez-Clare, 1995. "Costly Distortion of Information in Agency Problems," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 675-689, Winter.
- Figuieres, Charles & Leplay, Solenn & Midler, Estelle & Thoyer, Sophie, 2012.
"The REDD Scheme to Curb Deforestation: A Well-designed System of Incentives?,"
Strategic Behavior and the Environment,
now publishers, vol. 2(3), pages 239-257, September.
- Charles Figuières & Solenn Leplay & Estelle Midler & Sophie Thoyer, 2010. "The REDD scheme to curb deforestation: A well-designed system of incentives?," Working Papers 10-06, LAMETA, Universtiy of Montpellier, revised Jun 2010.
- Tacconi, Luca, 2009. "Compensated successful efforts for avoided deforestation vs compensated reductions," Ecological Economics, Elsevier, vol. 68(8-9), pages 2469-2472, June.
- Lederer, Markus, 2011. "From CDM to REDD+ -- What do we know for setting up effective and legitimate carbon governance?," Ecological Economics, Elsevier, vol. 70(11), pages 1900-1907, September.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
- Delacote, Philippe & Simonet, Gabriela, 2013.
"Readiness and Avoided deforestation policies: on the use of the REDD fund,"
Economics Papers from University Paris Dauphine
123456789/12984, Paris Dauphine University.
- Philippe Delacote & Gabriela Simonet, 2013. "Readiness and Avoided deforestation policies: on the use of the REDD fund," Working Papers 1312, Chaire Economie du Climat.
- Charles Figuières & Estelle Midler, 2011. "Deforestation as an externality problem to be solved efficiently and fairly," Working Papers 11-17, LAMETA, Universtiy of Montpellier, revised Aug 2011.
- Hammond, Peter J, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 263-82, April.
- Collier, Paul & Guillaumont, Patrick & Guillaumont, Sylviane & Gunning, Jan Willem, 1997. "Redesigning conditionality," World Development, Elsevier, vol. 25(9), pages 1399-1407, September.
When requesting a correction, please mention this item's handle: RePEc:mse:cesdoc:12059. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lucie Label)
If references are entirely missing, you can add them using this form.