REDD sticks and carrots in the Brazilian Amazon: assessing costs and livelihood implications

Transcription

1 REDD stcks and carrots n the Brazlan Amazon: assessng costs and lvelhood mplcatons Jan Börner (CIFOR) Sven Wunder (CIFOR) Shela Wertz-Kanounnkoff (CIFOR) Glenn Hyman (CIAT) Nathala Nascmento (UFPA) The CGIAR Research Program on Clmate Change, Agrculture and Food Securty (CCAFS), s a strategc partnershp of the Consortum of Internatonal Agrcultural Research Centers (CGIAR) and the Earth System Scence Partnershp (ESSP). The program s supported by the European Unon (EU), the Unted States Agency for Internatonal Development (USAID), the Canadan Internatonal Development Agency (CIDA), New Zealand s Mnstry of Foregn Affars and Trade, the Dansh Internatonal Development Agency (Danda) and the UK Department for Internatonal Development (DFID), wth techncal support from the Internatonal Fund for Agrcultural Development (IFAD). The vews expressed n ths document cannot be taken to reflect the offcal opnons of these agences, nor the offcal poston of the CGIAR or ESSP.

2 Post-Cancún REDD+ Polcy approaches and postve ncentves on ssues relatng to: Reducng Emssons from Deforestaton Degradaton + Conservaton of forest carbon stocks + Sustanable forest management + Forest carbon stock enhancement

3 REDD perspectves Over US$ 27 bllon n pledges Natonal governments as prme recpents Natonal autonomy n polcy nstrument choce

4 Context: Brazlan Amazon Reduce annual average deforestaton (19,500 km 2, ) by 80% untl 2016

5 Features of the Brazlan REDD Approach 1. Regulatory mechansms Commandand-Control (C&C) - Stcks Improvng exstng measures 2. Natonal program of payments for envronmental servces (PES) - Carrots Complementary condtonal compensaton 3. Improved terrtoral plannng

6 What scope for PES? Over 1.4 mllon km 2 threatened untl 2050 Börner et al, 2010, Ecologcal Economcs, 69

7 What scope for PES? Over 50% of threatened forests exhbt offset market compettve opportunty costs. Total annual cost > R$ 17 bllon ~ US$ 9 bllon Börner et al, 2010, Ecologcal Economcs, 69

8 What scope for PES? Only 25% of threatened forest land boast nsttutonal precondtons for condtonal ncentves (.e., well defned property rghts) Börner et al, 2010, Ecologcal Economcs, 69

9 Follow-up research questons 1. How much would t cost to acheve the 80% reducton target through stck type of polces? 2. How would such polces play out n terms of welfare and equty mpacts?

10 The workngs of stck polces To deforest or not to deforest. d 1,0 : 0 1 for for p p enf enf F F 0 0 unproftable proftable Opportunty costs Enforcement probablty Fne Based on Becker, 1968 Crme and punshment: an economc approach, JPE

11 Cost-effectveness of stck polces E REDD I D C D R REDD B Addtonalty Implementaton costs

12 Measurng the costs of stck polces at the farm forest fronter Cost categores Lablty establshment Coercon and admnstratve processes Fne revenues I 1 penf TC R D TC penf C L F D Pc C REDD Spatal unt

13 Welfare effect of stck polces W REDD I D D R p enf D F R Opportunty cost Fne payments

14 Travel tme (costs) n the Amazon

15 Determnng p enf a resource allocaton problem max v AREA I P 1 p1 v s p, Maxmzng deterrence by targetng largest offenders Subject to: BUDGET I TCv 1, v 1 Operatonal budget lmtatons when actng at remote forest fronters

16 Data sources Data type Source Annual deforestaton polygons (2002-9) INPE-PRODES (2002-9) 1 Muncpal-level average profts from agrcultural actvtes and tmber extracton (.e. REDD opportunty costs) Locaton and sze of land-reform settlements, protected areas, and ndgenous terrtores. Locaton and sze of protected areas and ndgenous terrtores Costs and locatons (dstrcts) of C&C enforcement operatons ( ) Populaton estmates (Amazon regon) Börner et al IBAMA (provded n 2007) IBAMA, at: (accessed n 2009) IBAMA records, provded n June 2009 IBGE 2 Agrcultural Census 2006

17 Actual and optmal enforcement strateges Observed enforcement Smulated enforcement 70% overlap

18 p enf as a functon of deforestaton polygon sze and dstance 1.20 Percentle rank score (penf) Shadow values [km 2 ]

19 [mllon R$] Implementaton costs and C&C 1,000 effectveness - aggregate ,000-1, C&C effectveness [%] Cost (clarfed rghts) Cost (status quo rghts) Net revenue (clarfed rghts) Net revenue (status quo rghts)

20 C&C cost-effectveness n space

21 Welfare effects n space

22 Summary Scope for postve REDD ncentves at natonal level s lmted pre-exstng use rght restrctons weak/poorly defned property rghts at many forest fronters C&C polces much cheaper to mplement than PES (<US$700 mllon versus >US$ 9 bllon annually), but wth contentous socal welfare mplcatons.

23 Implcatons for the desgn of REDD+ stcks The current enforcement strategy follows the Becker paradgm of low enforcement pressure and hgh fnes.e. lower fne levels and hgher enforcement pressure may ncrease both complance and cost-effectveness Stronger focus on cross-complance mechansm In states wth poor transport nfrastructure, C&C enforcement cannot be self-fnancng,.e. subnatonal compensaton mechansms

24 Implcatons for the desgn of REDD+ carrots Postve ncentves can only take the form of complance subsdes Gven pre-exstng C&C enforcement pressure, actual opportunty costs may be lower that most proft-based estmates suggest Imperfect enforcement of drect compensaton payments (lke currently under C&C) may produce huge neffcences n REDD schemes Hstory of lax enforcement represents a poltcal economy barrer to compensaton based on pure addtonalty crtera

25 Beware of REDD stcks dressed as carrots!