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
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Leslie Lipper: Agricultural and Development Economics Division, Food and Agriculture Organization

No 04-20, Working Papers from Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - 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: Carbon; Costa Rica; Deforestation; Forest products; Climate Change; Marketing; Poverty; Rural population; Tropical forests (search for similar items in EconPapers)
JEL-codes: I32 O13 Q31 Q51 Q54 Q56 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Will Buying Tropical Forest Carbon Benefit The Poor? Evidence from Costa Rica (2004)
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