Latin America - BOGOR, Indonesia — In the ongoing debate about how best to combat deforestation in Brazil, a new study shows that “sticks” are often cheaper than “carrots” — but that relying exclusively on such regulation would inflict a high cost on landowners.
“Carrots,” such as payment for environmental services (PES), offer landowners positive incentives such as conditional cash transfers for avoiding deforestation. “Sticks,” or command-and-control strategies, try to prevent deforestation through disincentives such as logging and deforestation bans backed by fines, confiscation, and imprisonment.
“We are not advocating one approach over another,” said the study’s lead author, Jan Börner, a scientist at the Center for Development Research at the University of Bonn and at the Center for International Forestry Research (CIFOR). “Rather, we’re trying to show that what is optimal will depend on what land users and policy makers perceive as a good balance between cost-effectiveness and equity.”
The study, published in Global Environmental Change, builds on earlier research by members of the same team. In 2010, researchers analyzed the scope for PES “carrots” for reducing deforestation in the Brazilian Amazon. They found a vast economic potential for ‘buying out’ deforestation, but also that tenure was not clear on two-thirds of threatened forestland, limiting the scope for PES, as any compensation scheme requires binding contracts with legal landholders.
‘WHO IS PAYING THE COSTS MATTERS’
In the new paper, the authors turn their attention to “sticks.”
“PES is often promoted as a potential alternative to command-and-control strategies on the grounds of cost-effectiveness,” Börner said. “But who is paying the costs matters.”
The researchers show that an effective command-and-control strategy to conserve tropical forests can be economically more attractive for governments because it does not involve additional budget outlays for PES. At the same time, they demonstrate that land users will shoulder most of the burden for protecting forests more effectively.
In the ideal, Westernized model, you impose a fine and people have to pay. In the Amazon, it’s easier to live in ‘illegality’
These findings also have implications for the success of Brazil’s strategy for REDD+ — a UN-backed initiative to reward countries for avoiding deforestation and enhancing forest carbon stocks.
“Policy makers need an innovative combination of incentives and disincentives to make tropical forest conservation in Brazil both financially viable and socially acceptable,” Börner said.
A SPATIAL APPROACH
The study’s approach “allows us to look at how implementation costs, and costs to land users, are distributed in space,” Börner said. “Both vary substantially across the Amazon region.”
Land users close to roads, for example, are more likely to be monitored by authorities and thus experience loss of income. Opportunity costs of complying with the forest law, but forgoing profitable forest conversion options, are also high in some of these locations.
Using data from various sources, including the Brazilian Environmental Protection Agency (IBAMA), the researchers developed a spatial enforcement model that simulates the implementation costs as well as effects on deforestation and income of forest law enforcement in the Amazon.
“We think this way of spatially representing the costs and benefits of conservation policy can be useful as a tool for policy design,” Börner said. “It may also serve to support other economic tools for policy analysis, such as partial and general equilibrium models.”
ESTIMATING THE PRICE
In 2004, Brazil adopted an action plan to combat deforestation in the Amazon that included enhancing monitoring and field-based enforcement. Five years later, it committed to a REDD+ strategy of reducing forest loss by 80 percent against historic standards. The price tag for success was estimated at between R$13 billion-36 billion [approximately USD 8 billion-16 billion].
Achieving this goal through enforcement, the study says, would cost about R$392 million in annual operational expenses for field presence and administrative follow-up. This figure is just over half of what could be generated by fines — even though the collection rate for fines is currently extremely low.
“In the ideal, Westernized model, you impose a fine and people have to pay,” said study co-author Sven Wunder, a CIFOR principal scientist based in Brazil. “In the Amazon, it’s easier to live in ‘illegality.’ Even if you can identify the perpetrators of forest clearing, the rate of collection for environmental fines is less than 1 percent.
“Command-and-control tools can be important for forest conservation, and are not as expensive as one would think,” he continued. “Increasing the collection rate to about 50 percent could make it almost cost-neutral for the government.”
On the other hand, a pure “stick” approach — without compensatory “carrots” — would cost land users more than R$2.5 billion annually in forgone opportunity costs and coercive measures, or more than six times the government’s operational costs. Combining “sticks and carrots” could thus help addressing questions of inequity, and increase the political viability of REDD+, the authors suggested.
The findings have policy implications both within Brazil and abroad.
“Policy makers in other countries may benefit from a better understanding of how Brazil has reduced deforestation rates,” Börner said. “But I also think it’s important for Brazilian decision makers to know where in the more than 5 million square kilometers of the Amazon their policies are most effective and why.”
The researchers have already developed a third paper that builds on the first two studies. Presented at the International Society for Ecological Economics conference in Iceland in August, the study focuses on the implications of combining a policy of “sticks and carrots.” It shows that effective enforcement can be key for overall cost-effectiveness and equity outcomes alike.
For more information about the issues in this article, please contact Sven Wunder at firstname.lastname@example.org.
This study was conducted as part of the Global Comparative Study on REDD+, led by the Center for International Forestry Research (CIFOR). It was funded by the Norwegian Agency for Development Cooperation, the Australian Agency for International Development, the UK Department for International Development, the European Commission, the Department for International Development Cooperation of Finland, the David and Lucile Packard Foundation and the CGIAR Research Program on Forests, Trees and Agroforestry.
We want you to share Forests News content, which is licensed under Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0). This means you are free to redistribute our material for non-commercial purposes. All we ask is that you give Forests News appropriate credit and link to the original Forests News content, indicate if changes were made, and distribute your contributions under the same Creative Commons license. You must notify Forests News if you repost, reprint or reuse our materials by contacting email@example.com.