Deforestation in developing countries Causes policies and positive

Deforestation in developing countries Causes, policies and positive incentives

Contents • Introduction • Causes of deforestation • Policy approaches • Positive incentives • Conclusions

Introduction • Deforestation occurs when agents clear forested land to change its use (permanent or not? ) • Land use change is perceived to bring more benefits than preserving the forest. • FAO: “Change of land cover with depletion of tree crown cover to less than 10 percent” • Kyoto: “the direct human-induced conversion of forested land to non forested land “

Causes of deforestation • Direct (immediate or proximate): where should incentives apply? • Underlying (indirect): What incentives would work? • Agents: To whom should incentives be given? • Predisposing conditions: Is deforestation likely?

Policy approaches and positive incentives • Reducing emissions from deforestation -> reducing deforestation rates • Policies and activities outside the forest sector largely contribute to deforestation • Most examples of policies and incentives to reduce deforestation aim to support forest conservation and sustainable management. • Few examples outside the forest sector are available: policies on other sectors generally disregard their impact on forests

Policy approaches • Reducing prices and demand for agricultural and forestry products – They target public policies and economic factors. Blunt instruments, difficult to target. Effectiveness is moderate to uncertain. Rely on underlying causes. • Increasing the costs associated with deforestation – They target direct causes of deforestation. Effectiveness is moderate to low. Rely strongly on enforcement. • Addressing land-tenure – Tackle directly property rights and negative incentives to clear forest. Effectiveness is moderate to variable.

Policy approaches • Increasing the profitability of managing forests sustainably – They promote environmental investments. Rely on funding. Effectiveness is variable to high. Rely strongly on funding. • Increasing the political status of forest conservation – More a substantial policy change. Experiences in developed countries are generally positive, but this may depend on other factors.

Positive incentives • Positive incentives are economic, legal or institutional measures designed to encourage beneficial activities. • Seek a change in agent’s behavior • Most are financial in nature • Effectiveness cannot be generalized – Under specific circumstances – Effective locally, while implemented and as long as financial sustainability is ensured.

Positive incentives • Subsidies: A “financial” aid to reduce the price of a desirable good. • Transfer payments: compensations paid to individuals for an action (needs to be sufficient) – PES: A service is provided – Swaps: purchase of debt – Funds: financial resources for a specific purpose • Tax relieves (do not require funds) • Permit trading (e. g. development rights, rely on enforcement) • Enhancement of property rights (transfer responsibility, work if people depend on forest resources)

Examples • PES: Costa Rica covered more than 300, 000 ha of forests through a domestic tax on fossil fuels. Payments directly to forest owners • Swaps: Philippines: US 8 Million during 14 years for the conservation of coastal forests • Property rights: A revolving fund for biodiversity conservation that purchases land resells it to people interested in conservation • Permit trading: Tradable development rights (TDR) in the US, for example, the New Jersey Pinelands

Conclusions • Deforestation is multidimensional and causes are heterogeneous across the world: different incentives and policies • Incentives and policies should tackle direct causes while responding to underlying ones. They should consider agents. • Little is known about the effectiveness of the incentives and policies as deforestation is complex. Comparable studies are scarce.

Conclusions • Effectiveness of policies and positive incentives cannot be generalized. It depends on a wide range of factors and can vary through time as underlying factors vary. • Few examples of policies to reduce deforestation are available in sectors other than forestry • Incentives operate over agents and may address causes outside the forest sector. • There are successful examples for most types of incentives, but are case specific.

Thank you

Direct causes • Agriculture (including cattle ranching) • Logging • Infrastructure development Source: Geist and Lambin, 2002 * Cattle ranching ** Road development

Underlying causes • Policy and institutions (public, weak forest institutions, corruption and land tenure) • Economy: wealth and market structures • Technology: if promotes extensification • Culture: individual and social • Demographics

Underlying causes: Policies