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Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation

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  • Seema Jayachandran
  • Joost de Laat
  • Eric F. Lambin
  • Charlotte Y. Stanton

Abstract

This paper evaluates a Payments for Ecosystem Services (PES) program in western Uganda that offered forest-owning households cash payments if they conserved their forest. The program was implemented as a randomized trial in 121 villages, 60 of which received the program for two years. The PES program reduced deforestation and forest degradation: Tree cover, measured using high-resolution satellite imagery, declined by 2% to 5% in treatment villages compared to 7% to 10% in control villages during the study period. We find no evidence of shifting of tree-cutting to nearby land. We then use the estimated effect size and the "social cost of carbon" to value the delayed carbon dioxide emissions, and compare this benefit to the program's cost.

Suggested Citation

  • Seema Jayachandran & Joost de Laat & Eric F. Lambin & Charlotte Y. Stanton, 2016. "Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation," NBER Working Papers 22378, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22378
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    3. Pena-Levano, L. & Taheripour, F. & Tyner, W., 2018. "Cost comparison of climate change mitigation options," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277417, International Association of Agricultural Economists.
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    5. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press, vol. 33(4), pages 541-571.
    6. Wollni, M. & Lanza, G. & Ibanez, M., 2018. "Social capital and conservation under collective and individual incentive schemes: a framed field experiment in Indonesia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275968, International Association of Agricultural Economists.
    7. Andres Gonzalez Lira & Ahmed Mushfiq Mobarak, 2018. "Enforcing Regulation under Illicit Adaptation," HKUST IEMS Working Paper Series 2018-57, HKUST Institute for Emerging Market Studies, revised Aug 2018.
    8. Luc Behaghel & Karen Macours, & Julie Subervie, 2018. "Can RCTs help improve the design of CAP," Working Papers hal-01974425, HAL.
    9. Luc Behaghel & Karen Macours, & Julie Subervie, 2018. "Can RCTs help improve the design of CAP," CEE-M Working Papers hal-01974425, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
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    18. Asher, Sam & Garg, Teevrat & Novosad, Paul, 2018. "The Ecological Footprint of Transportation Infrastructure," 2018 Annual Meeting, August 5-7, Washington, D.C. 274246, Agricultural and Applied Economics Association.
    19. Usmani Faraz & Jeuland Marc & Pattanayak Subhrendu, 2018. "NGOs and the effectiveness of interventions," WIDER Working Paper Series 59, World Institute for Development Economic Research (UNU-WIDER).
    20. Bocci, Corinne F. & Lupi, Frank & Sohngen, Brent, 2018. "Timber or Carbon? Evaluating forest conservation strategies through a discrete choice experiment conducted in northern Guatemala," 2018 Annual Meeting, August 5-7, Washington, D.C. 274011, Agricultural and Applied Economics Association.
    21. Bladimir Carrillo & Danyelle K. Branco & Juan C. Trujillo & João E. Lima, 2019. "The Externalities of a Deforestation Control Policy in Infant Health: Evidence from Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 67(2), pages 369-400.
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    More about this item

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • 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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