Policy Impacts on Deforestation Lessons Learned ... - The REDD Desk

<strong>Policy</strong> <strong>Impacts</strong> on DeforestationLessons Learned from Past Experiences to Inform New Initiativesdeforestation threat was low and the payments were nottargeted at threat and thus the forests receiving paymentwould largely have remained standing without payments.However, as for protected areas, looking aheadplanners could explicitly aim payments at forest facingthreats. Costa Rica’s “learning laboratory for the world”also confirms that the details of program design can becritical. Even after the program was already in place, theevolution over time and space in how the payments wereallocated affected the bias towards low threat and thuspayment impact.Here, as for protected areas, it is common knowledgewhy ecosystem services payments might prevent deforestationso we focus on why they might not work. Whenpayment allocation drives of agency decisions, the forcesleading protected areas to be biased to lower deforestationthreats apply to payments too. And as noted, whenlandowners choose to participate, given their detailedknowledge of their own lands they can pick out parcelswith poor soil quality or slopes to offer to the paymentsprogram. Those might remain forested even withoutpayments, such that payment impacts could be low.Evaluating impacts correctly requires comparing toother similar parcels.Landowner choice raises other issues too. One large relevantgroup is households in subsistence communitieswho grow crops for their own use and also collect nontimberforest products from unprotected open-accessforest and/or locally protected community forests (Sillset al. 2003). The most valuable forest products vary byregion and forest type, with fuelwood more predominantin arid Asia and Africa (see Arnold et al. 2006, Hyde andAmacher 2001, and Sills et al. 2003).For these landowners, if REDD policies such as paymentsyield higher-quality or more extensive foreststocks to which households have access, householdsmay be better off. These benefits can be on the orderof several months of agricultural returns (Kohlin andAmacher 2005; Kohlin and Parks 2001) including viareduced collection times (Cooke 1998; Cooke et al. 2008;MacDonald et al. 2001; Arnold et al. 2006). Under thissort of scenario, REDD can bring both climate changemitigation and adaptation benefits, e.g., a form of naturalinsurance (Pattanayak and Sills 2001).Yet if REDD policies largely benefit private forest stocksinstead, the additional rent may lead to higher enforcementin, i.e., exclusion from, private forested areas.This may not only decrease the welfare of subsistencehouseholds but also shift their collection activity to moredegraded forests (Arnold et al. 2006; Cooke St. Claire etal. 2001; Vermeulen 2001). This dynamic could also berelevant if official protected areas (see 2.1 above) are betterenforced due to REDD payments.Given these distinct possibilities, farmers could beinvolved in policy design. Arnold et al. (2006) find in areview that transfer of local wood fuel reserves to communitiescan raise access to wood as well as revenuesgovernments collect through taxes and royalties inreturn for the guarantee of property rights (see 2.4 ondecentralization). Yet at least for fuelwood, the transactionscosts here may be high (Hofstad 1997). Still, wenote the possibility of “participatory payments schemes.”2.2.1. Case Evidence2.2.1.1. Initial efforts. As summarized in Sills et al. (forthcoming),some early studies of pioneering Costa RicanPSA (Programa de Servicios Ambientales) paymentsfind more forest and less agriculture on fincas (essentiallyfarms) that receive payments. Yet the paymentsprogramparticipants differ from the nonparticipantsin terms of characteristics that affect land use (Ortiz etal. 2003; Miranda et al. 2003; Zbinden and Lee 2005).For instance, landowners can only obtain PSA paymentson fincas for which they can establish clear ownership,while others are more likely to clear forest just to establishsuch property rights. Thus clearing may be lower onPSA fincas for reasons unrelated to PSA.Studies also compare forest cover in a given finca beforeand after the establishment of the PSA. A telephone surveyof 100 PSA landowners across Costa Rica found 43%of forest receiving payments already was protected while36% was used for grazing before the contract (Ortiz et al.2003). Yet even concerning the latter significant number,rising forest cover on PSA fincas does not necessarilymean that the increase is due to PSA. Forest covercould be already increasing due to shifts in other factors(see Brockett and Gottfried 2002; de Camino et al. 2000;Miranda et al. 2006; Sánchez-Azofeifa et al. 2007). Evaluationsshould ideally control for such time trends.A variation on this approach to evaluating paymentimpacts is illustrated by Sierra and Russman (2006). Theystudy land use on recently enrolled properties (contractssigned in the last two years) to approximate what theland use on properties that had been enrolled for morethan five years would have been had there been no paymentsprogram. They find the PSA participants in theOsa Peninsula with recent contracts have significantlymore land in agricultural production than do earlierparticipants. They conclude that payments allow landholdersto invest in off-farm enterprises and accelerateNicholas Institute25