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Reducing Greenhouse Gas Emissions by Forest Protection: The Transaction Costs of REDD

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  • Lee J. Alston
  • Krister Andersson

Abstract

Understanding and minimizing the transaction costs of policy implementation are critical for reducing tropical forest losses. As the international community prepares to launch REDD+, a global initiative to reduce greenhouse gas emissions from tropical deforestation, policymakers need to pay attention to the transactions costs associated with negotiating, monitoring and enforcing contracts between governments and donors. The existing institutional design for REDD+ relies heavily on central government interventions in program countries. Analyzing new data on forest conservation outcomes, we identify several problems with this centralized approach to forest protection. We describe options for a more diversified policy approach that could reduce the full set of transaction costs and thereby improve the efficiency of the market-based approach for conservation.

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  • Lee J. Alston & Krister Andersson, 2011. "Reducing Greenhouse Gas Emissions by Forest Protection: The Transaction Costs of REDD," NBER Working Papers 16756, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16756 Note: EEE LE PE POL
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    Cited by:

    1. 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.
    2. Bård Harstad & Torben K. Mideksa, 2017. "Conservation Contracts and Political Regimes," Review of Economic Studies, Oxford University Press, vol. 84(4), pages 1708-1734.
    3. Milt, Austin W. & Armsworth, Paul R., 2017. "Performance of a cap and trade system for managing environmental impacts of shale gas surface infrastructure," Ecological Economics, Elsevier, vol. 131(C), pages 399-406.
    4. Mundaca, Luis & Mansoz, Mathilde & Neij, Lena & Timilsina, Govinda R, 2013. "Transaction costs of low-carbon technologies and policies : the diverging literature," Policy Research Working Paper Series 6565, The World Bank.
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    7. 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.
    8. Harstad, Bård, 2016. "The market for conservation and other hostages," Journal of Economic Theory, Elsevier, vol. 166(C), pages 124-151.
    9. Torpey-Saboe, Nichole & Andersson, Krister & Mwangi, Esther & Persha, Lauren & Salk, Carl & Wright, Glenn, 2015. "Benefit Sharing Among Local Resource Users: The Role of Property Rights," World Development, Elsevier, vol. 72(C), pages 408-418.
    10. Phan, Thu-Ha Dang & Brouwer, Roy & Davidson, Marc David, 2017. "A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects," Ecological Economics, Elsevier, vol. 133(C), pages 1-10.
    11. Bård Harstad, 2012. "Buy Coal! A Case for Supply-Side Environmental Policy," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 77-115.

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    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
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    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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