Unveiling information on opportunity costs in REDD: who obtains the surplus when policy objectives differ?
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Unveiling information on opportunity costs in REDD : who obtains the surplus when policy objectives differ? / Delacote, Philip; Palmer, Charles; Bakkegaard, Riyong Kim; Thorsen, Bo Jellesmark.
In: Resource and Energy Economics, Vol. 36, No. 2, 2014, p. 508-527.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Unveiling information on opportunity costs in REDD
T2 - who obtains the surplus when policy objectives differ?
AU - Delacote, Philip
AU - Palmer, Charles
AU - Bakkegaard, Riyong Kim
AU - Thorsen, Bo Jellesmark
N1 - Published online 24 July 2013
PY - 2014
Y1 - 2014
N2 - Improving information about individual opportunity costs of deforestation agents has the potential to increase the efficiency of REDD when it takes the form of a payment for environmental services scheme. However, objectives pursued in REDD projects may vary across policy makers. Within a theoretical framework, this paper explores the impacts of different policy objectives under two opportunity cost settings: asymmetric and full information. For a policy maker aiming to maximize net income from REDD, having full information may not increase the amount of forest conserved but could lead to a redistribution of rents away from agents. By contrast, for an environmental policy maker focused on maximizing the amount of forest conserved under REDD having full information increases the amount of forest conserved while reducing the rents received by agents. For a policy maker pursuing poverty alleviation objectives in REDD-affected communities, having full information makes no difference to overall welfare as rents remain with agents. The amount of deforestation avoided will at least be as high as under asymmetric information. These results are illustrated with data collected on opportunity costs in Amazonas State, Brazil.
AB - Improving information about individual opportunity costs of deforestation agents has the potential to increase the efficiency of REDD when it takes the form of a payment for environmental services scheme. However, objectives pursued in REDD projects may vary across policy makers. Within a theoretical framework, this paper explores the impacts of different policy objectives under two opportunity cost settings: asymmetric and full information. For a policy maker aiming to maximize net income from REDD, having full information may not increase the amount of forest conserved but could lead to a redistribution of rents away from agents. By contrast, for an environmental policy maker focused on maximizing the amount of forest conserved under REDD having full information increases the amount of forest conserved while reducing the rents received by agents. For a policy maker pursuing poverty alleviation objectives in REDD-affected communities, having full information makes no difference to overall welfare as rents remain with agents. The amount of deforestation avoided will at least be as high as under asymmetric information. These results are illustrated with data collected on opportunity costs in Amazonas State, Brazil.
U2 - 10.1016/j.reseneeco.2013.07.002
DO - 10.1016/j.reseneeco.2013.07.002
M3 - Journal article
VL - 36
SP - 508
EP - 527
JO - Resource and Energy Economics
JF - Resource and Energy Economics
SN - 0928-7655
IS - 2
ER -
ID: 99138368