Designing REDD Schemes to Address Permanence Concerns: Empirical Evidence from Kenya

Abstract

Reducing Emissions from Deforestation and Forest Degradation (REDD) is an important topic in the debate on policies to mitigate climate change. This is the first study to test and compare the environmental impact of different REDD payment schemes in the field, and provide some insights on the effectiveness of different policies with respect to the permanence of forest-based emission reductions. This study implements a stated preference experiment of time allocation in the unique setting of the Kasigau Corridor REDD Project in Kenya, where charcoaling is a major source of forest degradation. The impact on time allocation is analyzed under the presumption that a hypothetical agricultural policy or an eco-charcoaling policy was introduced. We find that a policy that indexes eco-charcoal payments to charcoalers’ opportunity costs is the most effective policy in providing permanence in REDD: it lowers the amount of labor allocated to charcoaling even at high charcoal prices.