Incentive contracts for environmental services and their potential in REDD
Implementation arrangements for Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation can be seen as contracts that could address some of the inherent problems with forest carbon credits that often lead to high transaction costs -- measuring, monitoring, and verification. Self-enforcing contracts, where it is in the best interest of the environmental service providers to comply with the contracts, may be one way to reduce these costs if providers have incentives to uphold their end of the contract. While the literature on Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation is extensive, there is little information available to guide policy makers or investors on what form such contracts should take. After providing an overview of the current status of Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation and its role as a tool for reducing carbon emissions on an international scale, the paper describes key issues regarding implementation and reviews the literature on contracts from the related area of Payments for Ecosystem Services programs, which face similar challenges. The remainder of the paper reviews various contractual mechanisms from agricultural and forestry related projects that have been proposed or are being used in practice and discusses the various implications associated with their design and implementation.
|Date of creation:||01 Apr 2014|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
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.:
- Palmer, Charles, 2011. "Property rights and liability for deforestation under REDD+: Implications for 'permanence' in policy design," Ecological Economics, Elsevier, vol. 70(4), pages 571-576, February.
- Karan Capoor & Philippe Ambrosi, . "State and Trends of the Carbon Market 2008," World Bank Other Operational Studies 13405, The World Bank.
- Gong, Yazhen & Bull, Gary & Baylis, Kathy, 2010. "Participation in the world's first clean development mechanism forest project: The role of property rights, social capital and contractual rules," Ecological Economics, Elsevier, vol. 69(6), pages 1292-1302, April.
- Oscar J. Cacho & Graham R. Marshall & Mary Milne, 2003. "Smallholder Agroforestry Projects: Potential for carbon sequestration and poverty alleviation," Working Papers 03-06, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
- Bluffstone, Randy & Robinson, Elizabeth & Guthiga, Paul, 2013. "REDD+and community-controlled forests in low-income countries: Any hope for a linkage?," Ecological Economics, Elsevier, vol. 87(C), pages 43-52.
- Grieg-Gran, Maryanne & Porras, Ina & Wunder, Sven, 2005. "How can market mechanisms for forest environmental services help the poor? Preliminary lessons from Latin America," World Development, Elsevier, vol. 33(9), pages 1511-1527, September.
- Wunder, Sven, 2008. "Payments for environmental services and the poor: concepts and preliminary evidence," Environment and Development Economics, Cambridge University Press, vol. 13(03), pages 279-297, June.
- Jayant Sathaye & Kenneth Andrasko, 2007. "Special issue on estimation of baselines and leakage in carbon mitigation forestry projects," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(6), pages 963-970, July.
- Wu, JunJie & Babcock, Bruce A., 1996.
"Contract Design for the Purchase of Environmental Goods from Agriculture,"
Staff General Research Papers
1050, Iowa State University, Department of Economics.
- JunJie Wu & Bruce A. Babcock, 1996. "Contract Design for the Purchase of Environmental Goods from Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 935-945.
- G. Cornelis van Kooten, 2008. "Biological Carbon Sinks: Transaction Costs and Governance," Working Papers 2008-12, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
- Ghatak, Maitreesh & Pandey, Priyanka, 2000. "Contract choice in agriculture with joint moral hazard in effort and risk," Journal of Development Economics, Elsevier, vol. 63(2), pages 303-326, December.
- Suzi Kerr & Leslie Lipper & Alexander S.P. Pfaff & Romina Cavatassi & Benjamin Davis & Joanna Hendy & Arturo Sanchez, 2004. "Will Buying Tropical Forest Carbon Benefit The Poor? Evidence from Costa Rica," Working Papers 04-20, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
- Ferraro, Paul J., 2008. "Asymmetric information and contract design for payments for environmental services," Ecological Economics, Elsevier, vol. 65(4), pages 810-821, May.
- Angelsen, Arild & Kaimowitz, David, 1999. "Rethinking the Causes of Deforestation: Lessons from Economic Models," World Bank Research Observer, World Bank Group, vol. 14(1), pages 73-98, February.
- Massimo Tavoni & Valentina Bosetti & Brent Sohngen, 2007.
"Forestry and the Carbon Market Response to Stabilize Climate,"
2007.15, Fondazione Eni Enrico Mattei.
- Tavoni, Massimo & Sohngen, Brent & Bosetti, Valentina, 2007. "Forestry and the carbon market response to stabilize climate," Energy Policy, Elsevier, vol. 35(11), pages 5346-5353, November.
- Engel, Stefanie & Palmer, Charles & Taschini, Luca & Urech, Simon, 2011. "The Design of Payments for Avoided Deforestation Under Uncertainty: Insight from Real Option Theory," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114816, European Association of Agricultural Economists.
- Carmen Arguedas & Daan Soest, 2011. "Optimal Conservation Programs, Asymmetric Information and the Role of Fixed Costs," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 50(2), pages 305-323, October.
- Gan, Jianbang & McCarl, Bruce A., 2007. "Measuring transnational leakage of forest conservation," Ecological Economics, Elsevier, vol. 64(2), pages 423-432, December.
- Philip Fearnside, 2001. "The Potential of Brazil's Forest Sector for Mitigating Global Warming under the Kyoto Protocol," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 6(3), pages 355-372, September.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6829. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.