Economy-wide impacts of REDD when there is political influence

Timothy Laing and Charles Palmer

No 110, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: National-level strategies for Reducing Emissions from Deforestation and Degradation (REDD), financed by international transfers, have begun to emerge. A three-sector model is developed to explore the economy-wide effects of two policies, incentive payments and taxes, implemented by a government participating in REDD. Two sectors utilise forest as an input to production, one in which forest is substitutable for labour and one in which forest and labour are complements. The government factors in two opposing types of general equilibrium effect when determining the efficient payment level: one that changes the relative price of forest and one that results from the income transfer related to the payment. Unlike taxes, payments result in unequal income transfers and a shift in relative prices. With political influence, the forestusing sectors may lobby for lower payments in order to create a larger international

Date: 2013-04
New Economics Papers: this item is included in nep-env and nep-pol
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Related works:
Journal Article: Economy-wide impacts of REDD when there is political influence (2015)
Working Paper: Economy-wide impacts of REDD when there is political influence (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lsg:lsgwps:wp110

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