More such programs could be supported under a broader United Nations initiative called REDD+ (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries), in which richer countries and other international funders make payments to developing nations in exchange for protecting their vital trees. That quest that has only become more urgent after an explicit shout-out to the importance of combating deforestation, and REDD+, in the 2015 Paris climate agreement.
In the new study, just published as a working paper by the National Bureau of Economic Research, owners of forested land in 60 villages in the Hoima and Kibaale districts of western Uganda were offered $ 28 per year (70,000 Ugandan shillings) over two years for every hectare of forest that they did not harvest or chop down for other economic reasons. By comparison, in 61 other villages, nothing was offered — but rates of deforestation were monitored by satellite in all villages.
The result was that while forest cover decreased by between 7 and 10 percent in the “control” villages, it only dropped between 2 to 5 percent in the designated “treatment” villages, suggesting that the incentive payments were preventing a significant number of landowners from selling large trees for timber or charcoal, or chopping down forest to grow more crops.
“This study I think of as an important proof of concept that this did have a big impact, and a lot of the money that was being paid was really creating new forest cover that would have disappeared absent the program,” said Seema Jayachandran, an economist at Northwestern University who led the research, which was conducted with colleagues from Stanford, the Carnegie Institution for Science and the Porticus Foundation.
The study validates the idea that deforestation can be battled in a cost-effective way, a policy possibility that emerges in part because of vast global economic inequities. This has created a situation where encouraging forest preservation in relatively poorer, developing countries, where forests are often relied on for livelihoods, turns out to be more cost effective.
“In terms of the global impact, we don’t care if a tree is kept intact in the U.S. versus in Uganda, but the income someone is getting for that tree in Uganda is less than they’re getting in the U.S.,” said Jayachandran.
The study estimated that the cost of delaying the emission of a ton of carbon dioxide to the atmosphere under this program was just 57 cents — but the benefit of doing so, based on calculations using the EPA’s standard “social cost of carbon” measurement, was $ 1.11.
The Payments for Ecosystems Services (PES) approach is commonly used in international conservation, in part because it involves a voluntary contract that landowners can either accept or reject based on their own economic interests, rather than compulsory programs like new regulations or laws. But Jayachandran said that randomized studies set up to examine its effectiveness, from start to finish, have been missing.
“At least to my knowledge, [the study] was the first one that was a randomized evaluation, and set it up prospectively so that it could be evaluated,” she said.
“The vast majority of PES programs initiated by NGOs, governments, etc., have not been implemented as part of an experimental design, making the evaluation of their success difficult,” agreed Chris Kennedy, a professor of environmental science and policy at George Mason University, in a comment praising the research methodology.
This particular research was based on a large PES program set up by a number of official bodies. Much of the funding came from the Global Environment Facility, distributed by the United Nations’ Environment Programme, and went to the Ugandan government’s environment agency, the National Environment Management Authority. The Ugandan government then turned to the Chimpanzee Sanctuary and Wildlife Conservation Trust to put it in place, and that group collaborated with the researchers, allowing them to study the program.
In the Ugandan villages studied, the average landowner owned about 2 hectares of forest, which meant that such an individual could receive up to about $ 56 in U.S. dollars for leaving that forest completely intact for a year. The researchers report that this payment amounts to about 5 percent of an average annual income in the area. However, the authors noted that the average amount of money (in U.S. dollars) made by selling trees for timber in the area was $ 151 per year, and that between $ 30 and $ 100 per year can be earned per hectare of land converted for agriculture.
“Most people aren’t getting most of their income from the forest products, it’s from their small business, but then [they] top that up with some revenue from selling timber trees, or charcoal, and people use it as a source of emergency cash,” said Jayachandran.
So while Ugandan landowners often draw upon their forests to supplement their income when needed, the payment provided an incentive for them to at least delay doing so for a year or two. However, it did not mean that the forest would remain entirely protected after the two-year study period was up — indeed, the authors assumed in their calculations that it would not.
Nonetheless, even delaying carbon emissions from deforestation is economically valuable, and the study clearly showed that this occurred. (Not to mention the other valuable results that arise from preserving forest biodiversity in this ecologically sensitive area).
“In this short program, it’s really just about delaying carbon emissions, and delaying when you would deforest, which still has an economic value,” said Jayachandran.
Importantly, the study also failed to find any evidence that the payments had had the effect of displacing deforestation elsewhere, or that landowners were entering into hidden agreements to get around the system (if two individuals team up, so that one receives payments and one does not, then deforestation could still happen on a plot of land that is not covered by the agreement).
“It is particularly encouraging that it does not show displacement of the deforestation (= “leakage”) to some other area of forest,” noted Tom Lovejoy, an Amazon deforestation expert at George Mason University, by email in a comment on the study. “So it is clear that rewarding a landowner for a ‘service’ provided by their forest ecosystem actually works.”
Jayachandran noted that under the REDD+ program, many payments are expected to be from developed nation governments to developing nations to help them preserve their forests, which can involve simply enforcing forest protections and cracking down on illegal logging and land clearing. But programs like PES can supplement these, she said, by also creating incentives to conserve even among landowners who legally have a right to deforest, at least to some extent.
“For the privately owned land, or community owned land, it’s a very promising policy tool for REDD+,” she said.