Will Buying Tropical Forest Carbon Benefit The Poor? Evidence from Costa Rica

Suzi Kerr, Leslie Lipper, Alexander Pfaff, Romina Cavatassi, Benjamin Davis, Joanna Hendy and Arturo Sanchez

No 23807, ESA Working Papers from Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA)

Abstract: We review claims about the potential for carbon markets that link both payments for carbon services and poverty levels to ongoing rates of tropical deforestation. We then examine these effects empirically for Costa Rica during the 20th century using an econometric approach that addresses the irreversibilities in deforestation. We find significant effects of the relative returns to forest on deforestation rates. Thus, carbon payments would induce conservation and also carbon sequestration, and if land users were poor could conserve forest while addressing rural poverty. However, we find poorer areas are less responsive to returns. This and transaction costs could lead carbon payments policies not to be focused upon the poor. Other practical considerations may also dampen an understandable enthusiasm for service-based payments addressing both environment and inequality. Nonetheless, as the poor live in areas with more forest, they may benefit most from payments.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 37
Date: 2004
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Will Buying Tropical Forest Carbon Benefit The Poor? Evidence from Costa Rica (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:faoaes:23807

DOI: 10.22004/ag.econ.23807

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