Fort Collins, 19.5.2011 REDD sticks and carrots in the Brazilian Amazon: assessing costs and livelihood implications Jan Börner (CIFOR) Sven Wunder (CIFOR) Sheila Wertz-Kanounnikoff (CIFOR) Glenn Hyman (CIAT) Elizabeth Barona (CIAT) Edward Guevara (CIAT) Nathalia Nascimento (UFPA) The CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS), is a strategic partnership of the Consortium of International Agricultural Research Centers (CGIAR) and the Earth System Science Partnership (ESSP). The program is supported by the European Union (EU), the United States Agency for International Development (USAID), the Canadian International Development Agency (CIDA), New Zealand’s Ministry of Foreign Affairs and Trade, the Danish International Development Agency (Danida) and the UK Department for International Development (DFID), with technical support from the International Fund for Agricultural Development (IFAD). The views expressed in this document cannot be taken to reflect the official opinions of these agencies, nor the official position of the CGIAR or ESSP.
Presented at the 2011 Colorado Conference on Earth Systems Governance 19 May 2011 in Fort Collins, CO, US
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Fort Collins, 19.5.2011
REDD sticks and carrots in the Brazilian Amazon: assessing
costs and livelihood implications
Jan Börner (CIFOR)
Sven Wunder (CIFOR)
Sheila Wertz-Kanounnikoff (CIFOR)
Glenn Hyman (CIAT)
Elizabeth Barona (CIAT)
Edward Guevara (CIAT)
Nathalia Nascimento (UFPA)The CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS), is a strategic partnership of the Consortium of International Agricultural Research Centers (CGIAR) and the Earth System Science Partnership (ESSP). The program is supported by the European Union (EU), the United States Agency for International Development (USAID), the Canadian International Development Agency (CIDA), New Zealand’s Ministry of Foreign Affairs and Trade, the Danish International Development Agency (Danida) and the UK Department for International Development (DFID), with technical support from the International Fund for Agricultural Development (IFAD). The views expressed in this document cannot be taken to reflect the official opinions of these agencies, nor the official position of the CGIAR or ESSP.
Fort Collins, 19.5.2011
Outline
• Post-Cancún REDD+ and the Brazilian context
• Scope for carrot policies in the Amazon• An approach to analyze stick policies• Scenarios and results• Wrap up and implications
Fort Collins, 19.5.2011
Post-Cancún REDD+
Policy approaches and positive incentives on issues relating to:Reducing Emissions from• Deforestation• Degradation + Conservation of forest carbon stocks+ Sustainable forest management+ Forest carbon stock enhancement
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REDD perspectives
• Over US$ 27 billion in pledges
• National governments as prime recipients
• National autonomy in policy instrument choice
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Context: Brazilian Amazon
Reduce annual average deforestation (19,500 km2, 1996-2005) by 80% until
penf as a function of deforestation polygon size and distance
0.00
0.20
0.40
0.60
0.80
1.00
1.20
-20 -10 0 10 20 30 40
Per
cent
ile r
ank
scor
e (p
enf)
Shadow values [km 2]
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Implementation costs and C&C effectiveness - aggregate
-1,500
-1,000
-500
0
500
1,000
0 20 40 60 80 100
[mill
ion
R$]
C&C effectiveness [%]
Cost (clarified rights)
Cost (status quo rights)
Net revenue (clarified rights)
Net revenue (status quo rights)
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C&C cost-effectiveness in space
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Welfare effects in space
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Summary
• Scope for positive REDD incentives at national level is limited– pre-existing use right restrictions– weak/poorly defined property rights at many
forest frontiers
• C&C policies much cheaper to implement than PES (<US$700 million versus >US$ 9 billion annually), but with contentious social welfare implications.
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Implications for the design of REDD+ sticks
• The current enforcement strategy follows the “Becker paradigm” of low enforcement pressure and high fines – i.e. lower fine levels and higher enforcement pressure may increase both compliance and cost-effectiveness
• Stronger focus on cross-compliance mechanism• In states with poor transport infrastructure, C&C
enforcement cannot be self-financing, i.e. sub-national compensation mechanisms
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Implications for the design of REDD+ carrots
• Positive incentives can only take the form of “compliance subsidies”
• Given pre-existing C&C enforcement pressure, actual opportunity costs may be lower that most profit-based estimates suggest
• Imperfect enforcement of direct compensation payments (like currently under C&C) may produce huge inefficiencies in REDD schemes
• History of lax enforcement represents a political economy barrier to compensation based on pure additionality criteria