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Conservation payments under uncertainty

Engel, Stefanie, Palmer, Charles, Taschini, Luca and Urech, Simon (2015) Conservation payments under uncertainty. Land Economics, 91 (1). pp. 36-56. ISSN 0023-7639

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Identification Number: 10.3368/le.91.1.36

Abstract

The decision of whether to retain forest or convert to another land use is affected by uncertainty over future land use returns. This paper examines the design of conservation payments to landowners under uncertainty. Payments are either indexed to the returns from deforestation (agriculture), or to a market value associated with forest nonuse benefits. Payment size depends on the degree of correlation between payments and agricultural returns, and their relative volatility. Market-based payments for reducing emissions from deforestation and degradation (REDD) are simulated for Brazilian soybean growers. Payments indexed to carbon prices are larger than those indexed to international soybean prices.

Item Type: Article
Official URL: http://le.uwpress.org/
Additional Information: © 2015 by the Board of Regents of the University of Wisconsin System
Divisions: Grantham Research Institute
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HD Industries. Land use. Labor
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q23 - Forestry
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q24 - Land
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Date Deposited: 25 Jan 2016 11:06
Last Modified: 20 Mar 2019 02:46
Funders: Climate Policy Making for Enhanced Technological and Institutional Innovations, Economic and Social Research Council, Munich Re, Norwegian Agency for Development Cooperation
URI: http://eprints.lse.ac.uk/id/eprint/65129

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