North / South Contractual Design through the REDD+ Scheme

Mireille Chiroleu-Assouline, Jean-Christophe Poudou and Sébastien Roussel ()
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Sébastien Roussel: LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In this paper we aim at theoretically grounding the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme as a contractual relationship between countries in the light of the theory of incentives. Considering incomplete information about reference levels of deforestation as well as exogenous implementation and transaction costs, we compare two types of contracts : a deforestation performance-based contract and a conditional avoided deforestation-based contract. Because of the implementation and transaction costs, each kind of REDD+ contract implies a dramatically different information rent / efficiency trade-off. If the contract is performance-based (resp. conditionality-based), information rents are awarded to countries with the ex ante lowest (resp. highest) deforestation. In a simple quadratic setting, there is a reference level threshold in terms of efficiency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred.

Keywords: hidden information; deforestation; incentives; performance; (REDD+); Reducing Emissions from Deforestation and Forest Degradation; Conditionality; contract; information cachée; incitations; REDD+; Conditionnalité; contrat (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-cta and nep-env
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00747405v1
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Published in 2012

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Working Paper: North / South Contractual Design through the REDD+ Scheme (2012)
Working Paper: North / South Contractual Design through the REDD+ Scheme (2012)
Working Paper: North / South Contractual Design through the REDD+ Scheme (2012)
Working Paper: North / South Contractual Design through the REDD+ Scheme (2012)
Working Paper: North / South Contractual Design through the REDD+ Scheme (2012)
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