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Unveiling information on opportunity costs in REDD: Who obtains the surplus when policy objectives differ?

Thorsen, Bo Jellesmark; Bakkegaard, Riyong Kim; Palmer, Charles; Delacote, Philippe (2014), Unveiling information on opportunity costs in REDD: Who obtains the surplus when policy objectives differ?, Resource and Energy Economics, 36, 2, p. 508–527. http://dx.doi.org/10.1016/j.reseneeco.2013.07.002

Type
Article accepté pour publication ou publié
Date
2014-05
Journal name
Resource and Energy Economics
Volume
36
Number
2
Publisher
Elsevier
Pages
508–527
Publication identifier
http://dx.doi.org/10.1016/j.reseneeco.2013.07.002
Metadata
Show full item record
Author(s)
Thorsen, Bo Jellesmark
Bakkegaard, Riyong Kim
Palmer, Charles
Delacote, Philippe cc
Abstract (EN)
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.
Subjects / Keywords
Asymmetric information; Brazil; Deforestation; Opportunity costs; Payments for environmental services; REDD
JEL
Q23 - Forestry
H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q54 - Climate; Natural Disasters and Their Management; Global Warming
Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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