Work

Conservation Payments under Uncertainty

Year: 2015

Type: article

Abstract: The decision of whether to retain forest or convert to another land use is affected by uncertainty over future land use returns. This paper examines the design of conservation payments to landowners under uncertainty. Payments are either indexed to the returns from deforestation (agriculture), or to a market value associated with forest nonuse benefits. Payment size depends on the degree of correlation between payments and agricultural returns, and their relative volatility. Market-based payments for reducing emissions from deforestation and degradation (REDD) are simulated for Brazilian soybean growers. Payments indexed to carbon prices are larger than those indexed to international soybean prices. (JEL Q23, Q24)

Source: Land Economics

DOI: 10.3368/le.91.1.36

Authors: Stefanie Engel, Charles Palmer, Luca Taschini, Simon Urech

Language: English

Topic: Conservation, Biodiversity, and Resource Management

Subfield: Global and Planetary Change

Field: Environmental Science

Domain: Physical Sciences

SDGs: Life on land, Climate action

Open Access status: bronze

Funder: Economic and Social Research Council

Award: G8860778660