National REDD+ outcompetes gold and logging: The potential of cleaning profit chains

Han Overman, Anthony R. Cummings, Jeffrey B. Luzar and Jose M.V. Fragoso

World Development, 2019, vol. 118, issue C, 16-26

Abstract: Prominent recent evaluations of global research on REDD+ progress (Reducing Emissions from Deforestation and forest Degradation) conclude that ‘progress has been slower than expected’, ‘deforestation and degradation are deeply-rooted in powerful business-as-usual interests’ and that ‘[f]or the most part, new coalitions calling for change in forest governance have failed to overcome business-as-usual deforestation.’ Others have earlier pointed out that REDD+ will incentivize land grabbing (potentially endangering customary use rights of forest-dependent citizens), and will remain financially uncompetitive against current commercial forest uses. Combining nationwide data over a decade from Guyana’s United Nations-approved Forest Reference Emission Level (FREL) submission and national documents, we found that REDD+ implemented at national level would annually add almost a quarter to the country’s budget, and should not incentivize land grabbing as it places little direct value on forest, but financial penalties (lost income) on forest damage. We show quantitatively that national REDD+ in Guyana is competitive on a hectare basis when viewed from the resource owner’s perspective, even against high value commodities such as gold and timber (the country’s main emission drivers), and at a preliminary US$5 carbon price. Hidden by the latter appears a very lopsided distribution of overall net revenue between the state and private sector commodity chains (∼1:99 and ∼1:1200). We show government or electorate pressure towards more equitable distribution, or ‘cleaning profit chains’, would both be justified and highly worthwhile, without job loss. Investing part of this homegrown finance in further securing lawful and rational management of exhaustible forest-based resources has several additional economic, social and environmental benefits, including for forest-dependent citizens. Society awareness of current revenue ratios, REDD+ income losses, and potential returns of interventions may add helpful (i.e. economic, domestic) motivation for forest governance change in sovereign countries.

Keywords: REDD+ economic competitiveness; Forest commodities; Private state revenue ratios; Land grabbing; Equity; Forest governance change (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:118:y:2019:i:c:p:16-26

DOI: 10.1016/j.worlddev.2019.02.010

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