REDD+ as Result‐based Aid: General Lessons and Bilateral Agreements of Norway

The initiative known as Reducing Emissions from Deforestation and Forest Degradation (REDD+) officially became part of the international climate agenda in 2007. At that time, REDD+ was an idea regarding payment to countries (and possibly also projects) for reducing emission from forests, with funding primarily from carbon markets. The initiative has since become multi‐objective in nature; the policy focus has changed from a payments for environmental services (PES) approach to broader policies, and international funding primarily originates from development aid budgets. This “aidification” of REDD+ has made the program similar to previous efforts using conditional or results‐based aid (RBA). However, the experience of RBA in other sectors has scarcely been addressed in the REDD+ debate. The alleged advantages of RBA are poorly backed by empirical research. This paper reviews the primary challenges in designing and implementing a system of RBA, namely, donor spending pressure, performance criteria, reference levels, risk sharing, and funding credibility. It then reviews the four partially performance‐based, bilateral REDD+ agreements that Norway has entered with Tanzania, Brazil, Guyana, and Indonesia. These agreements and the aid experience provide valuable lessons for the design and implementation of future REDD+ mechanisms.     

REDD+机制在中国扩大发展途径研究——基于菲律宾的案例分析

自2005年以来,REDD+项目在巴西等热带地区得到了广泛地计划和实施。然而,在后京都时代全球背景下,只有拓宽REDD+机制的实施途径才能在所有森林覆盖的国家起到减排作用,这也为中国提供了参与减排的重要机会。积极参与REDD+机制,不仅有利于进一步开发我国碳汇潜力,更有利于提高我国在国际气候谈判中的地位、掌握碳交易市场的话语权。将菲律宾作为REDD+在新兴国家发展的典型案例,进行REDD+机制在中国扩大途径研究,构建中国REDD+机制多元化框架,同时为REDD+在中国的发展提出可行性的政策建议。     

A methodology to estimate impacts of domestic policies on deforestation: Compensated Successful Efforts for “avoided deforestation” (REDD)

Climate change mitigation would benefit from Reduced Emissions from Deforestation and Degradation (REDD) in developing countries. The REDD mechanism, still in discussion, would be in charge of distilling the right incentives and promoting the right policies for fostering forest conservation. The estimation of reduced emissions induced by the mechanism has been raised as an issue, either for issuing the proper amount of carbon credits or for providing appropriate compensations of foregone revenues and other costs to host countries. This estimation would be based on the gap between observed deforestation and a counterfactual value. Although any prediction of deforestation rates (i.e. business-as-usual scenarios) is challenging, and any negotiated target is subject to obvious political influence, these two ways have been prioritirized so far to determine the counterfactual value. In other words proposals focused on a results-based approach, the relevance of which is questionable because estimations of avoided deforestation are hardly reliable. With this approach, issuance of carbon credits and distribution of financial compensations could threaten respectively environmental integrity of the scheme and equity outcomes. Rather than considering overall deforestation (predicted and observed), we argue that a REDD mechanism would gain from linking distribution of carbon finance to real efforts (opposed to “results”) that developing countries implement for slowing deforestation rates. This would provide strong incentives to design and enforce suitable policies and measures. The methodology we present to measure these efforts (labeled Compensated Successful Efforts) is based on the rationale that overall deforestation is partly due to structural factors, and to domestic policies and measures. This typology differs from others presented in the literature such as proximate/underlying causes, or economic/institutional factors. Using an econometric model, our approach estimates efforts that are (i) independent of structural factors (economic development, population, initial forest area, agricultural export prices), (ii) estimated ex post at the end of the crediting period, and (iii) relative to other countries. In order to illustrate the methodology we apply the model to a panel of 48 countries (Asia, Latin America, Africa) and four periods between 1970 and 2005. We conclude on the feasibility to estimate avoided deforestation using the Compensated Successful Efforts approach. In addition to being conservative from an environmental perspective, this approach tends to guarantee fairness by accounting for dramatic changes during the commitment period. Last, such estimations of avoided deforestation could provide guidance for decisions on further financing of national programs to curb deforestation, as it would help to distinguish between successful and unsuccessful policies.     

Institutional design for improved forest governance through REDD: Lessons from the global environment facility

This contribution focuses on carbon mitigation and biodiversity conservation in the context of the UN initiative for Reduced Emissions from Deforestation and forest Degradation in Developing countries (REDD). The design of REDD is important as it may channel much of the international funding that will potentially be made available for future environmental problem-solving in developing countries. The most important multilateral environmental funding mechanism is the Global Environment Facility (GEF). With its basic structural similarity to the emerging REDD, it provides a good starting point for drawing lessons relevant to the design of REDD. In explaining GEF priorities and performance we discuss the role of key actors as well as the organizational and institutional structure of GEF. These factors do not encourage coalitions for addressing environmental problems in the poorest countries. The institutional setting of REDD in the Convention on Climate Change may further exacerbate this trend, as neither conservation nor socioeconomic concerns like the rights and well-being of indigenous peoples and local communities are addressed. Factors that favour utilizing a similar organization structure include scope for donor trust, for bringing in established competence and a comprehensive approach. REDD must be wary of catering solely to a Northern environmental agenda.     

Behavioral economics and climate change policy

The policy recommendations of most economists are based on the rational actor model. The emphasis is on achieving efficient allocation by insuring that property rights are completely assigned and that market failures are corrected. This paper takes the position that so-called behavioral “anomalies” are central to human decision-making and, therefore, should be the starting point for effective economic policies. This contention is supported by game theory experiments involving humans and closely related primates. This research suggests that the standard economic approach to climate change policy, with its focus on narrowly rational, self-regarding responses to monetary incentives, is seriously flawed.     

Geographically explicit global modeling of land-use change, carbon sequestration, and biomass supply

This study aims to determine whether carbon sequestration policies could present a significant contribution to the global portfolio of climate change mitigation options. The objective is to model the effects of policies designed to induce landowners to change land use and management patterns with a view to sequester carbon or to reduce deforestation. The approach uses the spatially explicit Dynamic Integrated Model of Forestry and Alternative Land Use (DIMA) to quantify the economic potential of global forests. The model chooses which of the land-use processes (afforestation, reforestation, deforestation, or conservation and management options) would be applied in a specific location, based on land prices, cost of forest production and harvesting, site productivity, population density, and estimates of economic growth. The approach is relevant in that it (1) couples a revised and updated version of the Special Report on Emissions Scenarios with the dynamic development of climate policy implications through integration with the Model for Energy Supply Strategy Alternatives and their General Environmental Impact (MESSAGE); (2) is spatially explicit on a 0.5° grid; and (3) is constrained by guaranteeing food security and land for urban development. As outputs, DIMA produces 100-year forecasts of land-use change, carbon sequestration, impacts of carbon incentives (e.g., avoided deforestation), biomass for bioenergy, and climate policy impacts. The modeling results indicate that carbon sequestration policies could contribute to a significant part of the global portfolio of efficient climate mitigation policies, dependent upon carbon prices.     

Austrian economics and climate change

The aim of this paper is to outline and defend an Austrian policy response to climate change. A privatised climate change policy, based on Austrian welfare economics, is the only way to defend to the greatest possible degree the liberties both of fossil fuel users and people whose property rights will be violated if carbon emissions cause climate change. Neoclassical and ‘Post-Austrian’ analyses of climate change are both theoretically unsound and impractical, in requiring for their implementation a foundation in reliable scientific knowledge that is not available. Anthropogenic climate change is a putative interpersonal conflict rather than market failure. The use of fossil fuels should be subject to side-constraints designed to avoid the infringement of other people’s property rights. Tort litigation would protect these rights, where necessary. Litigation would also promote the public understanding and even the advancement of climate science.     

Piracy and limited liability

This paper analyzes the effects of end-user piracy on a monopolized software industry with network effects in which consumers have heterogeneous income and limited liability. Limited liability produces a piracy cost which increases with income. The monopolist thus may be able to exploit the network effect brought about by the piracy of low-income consumers to charge a higher price to high-income consumers thereby earn a higher profit, especially when the monopolist can prevent the network effect from spilling over to the high-income consumers. If intellectual property rights policies are severe enough, then the monopolist can avoid the spillover. Otherwise it may become a case where each high-income buyer benefits from the piracy but the monopolist is hurt. However, a severe policy may bring about a high piracy rate since it invites the monopolist to raise the price.      

明晰产权与规范政府

2 0世纪 80年代以来的放权让利含有丰富的产权改革内涵。它既使财政从国有企业的融资活动中逐步淡出 ,也使财政不再为国有企业承担盈亏责任。但是 ,这种改革未能实现国有企业的产权明晰化 ,因为它局限于国有企业制度中的经济性层面 ,没有触及国有企业制度中的行政性层面。这是行政权利益左右中国改革走向的结果。要进一步深化改革 ,必须约束行政权力 ,规范政府行为 ,必须改革国有企业制度中的行政性层面。不然 ,明晰产权就是一句空话     

Assessing sustainable forest management under REDD +: A community-based labour perspective

Reducing emissions from deforestation and forest degradation plus (REDD +) encourages economic support for reducing deforestation and conserving or increasing existing forest carbon stocks. The way in which incentives are structured affects trade-offs between local livelihoods, carbon emission reduction, and the cost-effectiveness of a REDD + programme. Looking at first-hand empirical data from 208 farming households in the Bolivian Amazon from a household economy perspective, our study explores two policy options: 1) compensated reduction of emissions from old-growth forest clearing for agriculture, and 2) direct payments for labour input into sustainable forest management combined with a commitment not to clear old-growth forest. Our results indicate that direct payments for sustainable forest management – an approach that focuses on valuing farmers' labour input – can be more cost-effective than compensated reduction and in some cases is the most appropriate choice for achieving improved household incomes, permanence of changes, avoidance of leakages, and community-based institutional enforcement for sustainable forest management.     

The Climate Policy Hold‐Up: Green Technologies,Intellectual Property Rights,and the Abatement Incentives of International Agreements

The success of global climate policies over the coming decades depends on the diffusion of “green” technologies. Using a simple model, we highlight a conflict between international environmental agreements (IEAs) on emissions reductions and international systems of intellectual property rights (IPRs) on abatement technologies. When IPRs are strong and global, IEA signatories anticipate rent extraction by innovators. This hold‐up effect reduces abatement, potentially to levels below those of non‐signatories, and it reduces the number of signatories to self‐enforcing IEAs. We explore policy options that respect existing property rights, but avoid the strategic interaction between signatories to an IEA and innovators.     

Willingness to Pay for Forest Property Rights and the Value of Increased Property Rights Security

This paper studies the willingness to pay (WTP) for forest property rights in Viet Nam. We do so by asking respondents to estimate the value of two different forest property rights regimes where only the level of property security differs and all other forest plot characteristics are constant. We use this information to identify the value of the property rights security. Our results reveal that a significant number of individuals are willing to pay for an additional area of forestland but that the amount offered appears to be inadequate to compensate sellers, as very few land market transactions actually take place. The results further indicate that income relates positively to WTP, irrespective of forest property regime. Wealth, age, and ethnicity also have an impact on the amount households are willing to pay. As expected, there was a significant mark-up on the more secure right. Econometric estimates of the difference between the WTP for secure and insecure property rights show that a higher level of female education, and household age decrease the difference between the two WTP measures while the difference tends to increase as income improves. This has important policy implications, as it indicates that households tend to evaluate the property rights institutions differently.     

A review of the spatial economics of non-timber forest product extraction: Implications for policy

Patterns of forest cover and forest degradation determine the size and types of ecosystem services forests provide. Particularly in low-income countries, nontimber forest product (NTFP) extraction by rural people, which provides important resources and income to the rural poor, contributes to the level and pattern of forest degradation. Although recent policy, particularly in Africa, emphasizes forest degradation, relatively little research describes the spatial aspects of NTFP collection that lead to spatial degradation patterns. This paper reviews both the spatial empirical work on NTFP extraction and related forest degradation patterns, and spatial models of behavior of rural people who extract NTFPs from forest. Despite the impact of rural people's behavior on resulting quantities and patterns of forest resources, spatial–temporal models/patterns rarely inform park siting and sizing decisions, econometric assessments of park effectiveness, development projects to support conservation, or REDD protocols. Using the literature review as a lens, we discuss the models' implications for these policies with particular emphasis on effective conservation spending and leakage.     

A Distributional Argument for Supply-Side Climate Policies

This paper presents a distributional argument for the use of supply-side climate policies whereby carbon emissions are controlled through (i) depletion quotas or (ii) permanent confiscation of a fraction of the in situ carbon stocks. The modeling considers intertemporal competitive equilibria in the Cobb-Douglas version of the Dasgupta-Heal-Solow-Stiglitz model of capital accumulation and costless resource extraction. It is shown how policies (i) and (ii) preserve the functional distribution of income between capital owners and resource owners, compared to the case where no climate policy is needed, while suggested demand-side policies do not. Such observations are of interest as avoiding functional redistribution may facilitate climate change negotiations. The paper discusses policy implications of the analysis outside the simplified setting of the stylized model.     

Assessing Effects of Mitigation Strategies for Global Climate Change with an Intertemporal Model of the U.S. Forest and Agriculture Sectors

A model of product and land markets in U.S. forest and agricultural sectors is used to examine the private forest management, land use, and market implications of carbon sequestration policies implemented in a" least social cost" fashion. Results suggest: policy-induced land use changes may generate compensating land use shifts through markets; land use shifts to meet policy targets need not be permanent; implementation of land use and management changes in a smooth or regular fashion over time may not be optimal; and primary forms of adjustment to meet carbon policy targets involve shifting of land from agriculture to forest and more intensive forest management in combinations varying with the policy target.     

Reconciling Economic Growth and Carbon Mitigation: Challenges and Policy Options in China

As the biggest carbon emitter in the world, China is facing tremendous pressure domestically and internationally. To promote the international efforts to tackle climate change, the Chinese government announced its 2020 carbon intensity target and is actively taking part in the international climate negotiations. In this paper, we review some of the climate burden-sharing proposals raised by Chinese scholars to shed some light on China's perspective on the post-Kyoto climate architecture. Then we summarize China's current pollution abatement policies and measures, and analyze some potential policy instruments for China to reconcile its future economic growth and carbon mitigation, as well as some practical design and enforcement issues to be considered for the near term.     

论国有制的可能

在国有企业改制过程以及相关的争论中,是否在国有制下不触及产权改革,而依靠引入像相对业绩比较这些技术手段实现国有制的效率,以往的产权理论尚未回答这类问题。本文论证了在纯国有制或者说集中所有权下,国家调控政策的巨大影响以及国家所有者和政策调控者身份的重合,加上国家无法准确把握政策的影响度,会造成这种判断信息的失真。这也说明,相对业绩比较无法取代产权改革,只能在国有经济比重不高的情况下才能起作用。     

Transaction costs and environmental policy design

This article synthesizes the growing empirical literature on transaction costs to identify pragmatic design recommendations for environmental and natural resource policies. The New Institutional Economics literature recognizes that appropriate policy choice and design will be a function of the specific characteristics of the problem. The physical and institutional determinants of both transaction costs and abatement costs should be considered in the policy design process due to potential interactions between them. Analysts also need to incorporate the extent to which the technologies, institutional environment, governance structures, or policy designs can be changed; some factors can only be adjusted to or “designed around” while others can be designed differently. This framework highlights the importance of property rights since transaction costs will be incurred to obtain or retain property rights and since the rights assignment may affect both the magnitudes and distribution of costs. Another implication is that education and extension programs or use of behavioral economics concepts to affect choices can be cost-effective in some circumstances. Policy design should take advantage of economies of scale and foster technical change. Appropriate sequencing of policy instruments may decrease transaction costs, particularly if there is potential for technical change.     

Land use rights,market transitions,and labour policy change in China (1980–84)

This paper provides a systematic analysis of the way shifts in property utilization rights in China induced another sequence of institutional changes that led to the rise of rural–urban labour migration from 1980 to 1984, a critical period in the country’s market transition. The paper shows that the 1980s’ Household Responsibility System (HRS), which brought family farming back from the communal system, endowed rural households not only with land use rights, but also with de facto labour allocation rights. These shifts in property relations promoted a growth in agricultural market size as well as the emergence of intraprovincial non‐hukou rural–urban migration, which may have made labour retention policies such as the small township strategy ineffective, and may have given the government an incentive to deregulate its subsequent labour market policy.     

REDD+and community-controlled forests in low-income countries: Any hope for a linkage?

Deforestation and forest degradation are estimated to account for between 12% and 20% of annual greenhouse gas emissions and in the 1990s (largely in the developing world) released about 5.8 Gt per year, which was bigger than all forms of transport combined. The idea behind REDD + is that payments for sequestering carbon can tip the economic balance away from loss of forests and in the process yield climate benefits. Recent analysis has suggested that developing country carbon sequestration can effectively compete with other climate investments as part of a cost effective climate policy.This paper focuses on opportunities and complications associated with bringing community-controlled forests into REDD +. About 25% of developing country forests are community controlled and therefore it is difficult to envision a successful REDD + without coming to terms with community controlled forests. It is widely agreed that REDD + offers opportunities to bring value to developing country forests, but there are also concerns driven by worries related to insecure and poorly defined community forest tenure, informed by often long histories of government unwillingness to meaningfully devolve to communities. Further, communities are complicated systems and it is therefore also of concern that REDD + could destabilize existing well-functioning community forestry systems.