Jonah Busch

Comparing climate and cost impacts of reference levels for reducing emissions from deforestation.

The climate benefit and economic cost of an international mechanism for reducing emissions from deforestation and degradation (REDD) will depend on the design of reference levels for crediting emission reductions. We compare the impacts of six proposed reference level designs on emission reduction levels and on cost per emission reduction using a stylized partial equilibrium model (the open source impacts of REDD incentives spreadsheet; OSIRIS). The model explicitly incorporates national incentives to participate in an international REDD mechanism as well as international leakage of deforestation emissions. Our results show that a REDD mechanism can provide cost-efficient climate change mitigation benefits under a broad range of reference level designs. We find that the most effective reference level designs balance incentives to reduce historically high deforestation emissions with incentives to maintain historically low deforestation emissions. Estimates of emission reductions under REDD depend critically on the degree to which demand for tropical frontier agriculture generates leakage. This underscores the potential importance to REDD of complementary strategies to supply agricultural needs outside of the forest frontier.

Structuring economic incentives to reduce emissions from deforestation within Indonesia

We estimate and map the impacts that alternative national and subnational economic incentive structures for reducing emissions from deforestation (REDD+) in Indonesia would have had on greenhouse gas emissions and national and local revenue if they had been in place from 2000 to 2005. The impact of carbon payments on deforestation is calibrated econometrically from the pattern of observed deforestation and spatial variation in the benefits and costs of converting land to agriculture over that time period. We estimate that at an international carbon price of

Reductions in emissions from deforestation from Indonesia’s moratorium on new oil palm, timber, and logging concessions

10/tCO2e, a “mandatory incentive structure,” such as a cap-and-trade or symmetric tax-and-subsidy program, would have reduced emissions by 163–247 MtCO2e/y (20–31% below the without-REDD+ reference scenario), while generating a programmatic budget surplus. In contrast, a “basic voluntary incentive structure” modeled after a standard payment-for-environmental-services program would have reduced emissions nationally by only 45–76 MtCO2e/y (6–9%), while generating a programmatic budget shortfall. By making four policy improvements—paying for net emission reductions at the scale of an entire district rather than site-by-site; paying for reductions relative to reference levels that match business-as-usual levels; sharing a portion of district-level revenues with the national government; and sharing a portion of the national governments responsibility for costs with districts—an “improved voluntary incentive structure” would have been nearly as effective as a mandatory incentive structure, reducing emissions by 136–207 MtCO2e/y (17–26%) and generating a programmatic budget surplus.

What Drives Deforestation and What Stops it? A Meta-Analysis of Spatially Explicit Econometric Studies

Significance Our paper is significant in a number of respects. First, we expand the literature on quasi-experimental evaluation of the causal impact of conservation measures to include agricultural concessions. Second, our report is rare in that we use panel data and techniques in a literature on spatially explicit land-use change econometrics that has necessarily relied upon cross-sectional analyses because of data-availability constraints. Third, our report is rare among land-use change scenario analyses in that we calibrate the effect of land-use designations empirically, rather than assuming idealized perfect effectiveness of conservation measures or complete conversion without such measures. Finally, we compare the effectiveness of place-based policies with alternative price-based instruments for climate-change mitigation within a globally significant landscape. To reduce greenhouse gas emissions from deforestation, Indonesia instituted a nationwide moratorium on new license areas (“concessions”) for oil palm plantations, timber plantations, and logging activity on primary forests and peat lands after May 2011. Here we indirectly evaluate the effectiveness of this policy using annual nationwide data on deforestation, concession licenses, and potential agricultural revenue from the decade preceding the moratorium. We estimate that on average granting a concession for oil palm, timber, or logging in Indonesia increased site-level deforestation rates by 17–127%, 44–129%, or 3.1–11.1%, respectively, above what would have occurred otherwise. We further estimate that if Indonesia’s moratorium had been in place from 2000 to 2010, then nationwide emissions from deforestation over that decade would have been 241–615 MtCO2e (2.8–7.2%) lower without leakage, or 213–545 MtCO2e (2.5–6.4%) lower with leakage. As a benchmark, an equivalent reduction in emissions could have been achieved using a carbon price-based instrument at a carbon price of

Measurement and monitoring needs, capabilities and potential for addressing reduced emissions from deforestation and forest degradation under REDD+

3.30–7.50/tCO2e (mandatory) or

Supplementing REDD+ with Biodiversity Payments: The Paradox of Paying for Multiple Ecosystem Services

12.95–19.45/tCO2e (voluntary). For Indonesia to have achieved its target of reducing emissions by 26%, the geographic scope of the moratorium would have had to expand beyond new concessions (15.0% of emissions from deforestation and peat degradation) to also include existing concessions (21.1% of emissions) and address deforestation outside of concessions and protected areas (58.7% of emissions). Place-based policies, such as moratoria, may be best thought of as bridge strategies that can be implemented rapidly while the institutions necessary to enable carbon price-based instruments are developed.

Eco-compensation for giant panda habitat.

We have constructed a comprehensive database of 117 spatially explicit econometric studies of deforestation published in peer-reviewed academic journals from 1996-2013. We present a metaanalysis of what drives deforestation and what stops it, based on the signs and significance of 5909 coefficients in 554 multivariate analyses. We find that forests are more likely to be cleared where economic returns to agriculture and pasture are higher, either due to more favorable climatological and topographic conditions, or due to lower costs of clearing forest and transporting products to market. Timber activity, land tenure security, and community demographics do not show a consistent association with either higher or lower deforestation. Population is consistently associated with greater deforestation, and poverty is consistently associated with lower deforestation, but in both cases endogeneity makes a causal link difficult to infer. Promising approaches for stopping deforestation include reducing the intrusion of road networks into remote forested areas; targeting protected areas to regions where forests face higher threat; tying rural income support to the maintenance of forest resources through payments for ecosystem services; and insulating the forest frontier from the price effects of demand for agricultural commodities.

Addressing uncertainty upstream or downstream of accounting for emissions reductions from deforestation and forest degradation

This paper presents an overview of the state of measurement and monitoring capabilities for forests in the context of REDD+ needs, with a focus on what is currently possible, where improvements are needed, and what capabilities will be advanced in the near-term with new technologies already under development. We summarize the role of remote sensing (both satellite and aircraft) for observational monitoring of forests, including measuring changes in their current and past extent for setting baselines, their carbon stock density for estimating emissions in areas that are deforested or degraded, and their regrowth dynamics following disturbance. We emphasize the synergistic role of integrating field inventory measurements with remote sensing for best practices in monitoring, reporting and verification. We also address the potential of remote sensing for enforcing safeguards on conservation of natural forests and biodiversity. We argue that capabilities exist now to meet operational needs for REDD+ measurement, reporting, and verification and reference levels. For some other areas of importance for REDD+, such as safeguards for natural forests and biodiversity, monitoring capabilities are approaching operational in the near term. For all REDD+ needs, measurement capabilities will rapidly advance in the next few years as a result of new technology as well as advances in capacity building both within and outside of the tropical forest nations on which REDD+ is primarily focused.

Parks versus payments: reconciling divergent policy responses to biodiversity loss and climate change from tropical deforestation

An international mechanism to reduce emissions from deforestation using carbon payments (REDD+) can be leveraged to make payments for forests’ biodiversity as well. Paradoxically, under conditions consistent with emerging REDD+ programs, money spent on a mixture of carbon payments and biodiversity payments has the potential to incentivize the provision of greater climate benefits than an equal amount of money spent only on carbon payments. This paradoxical result arises when diversifying payments across multiple services allows a funding agency to spend less on additional rents to existing suppliers of avoided deforestation and more on incentivizing the participation of new suppliers. (JEL Q23, Q54)

Forestry, Forest Fires, and Climate Change in Indonesia

Chinas achievements in giant panda conservation ([ 1 ][1]) are now jeopardized by recent tenure reform of its 167 million hectares of collective forest ([ 2 ][2]). The reform enables individual farming households to transfer or lease operation rights to outside enterprises. By allowing commercial