Addressing Additionality in REDD Contracts When Formal Enforcement Is Absent

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dc.creatorCordero Salas, Paula
dc.creatorRoe, Brian
dc.creatorSohngen, Brent
dc.date2013-09-26T16:10:25Z
dc.date2013-09-26T16:10:25Z
dc.date2013-06
dc.date.accessioned2026-07-01T00:52:05Z
dc.descriptionThe success of reducing carbon emissions from deforestation and forest degradation depends on the design of an effective financial mechanism that provides landholders sufficient incentives to participate and provide additional and permanent carbon offsets. This paper proposes self-enforcing contracts as a potential solution for the constraints in formal contract enforcement derived from the stylized facts of reducing emissions from deforestation and forest degradation implementation in developing countries. It characterizes the optimal self-enforcing contract and provides the parameters under which private enforcement is sustainable when the seller type that is, the opportunity cost of the land, is private information. The optimal contract suggests that the seller with low opportunity cost receives a positive enforceable payment equivalent to the information rents required for self-selection, in contrast to when the buyer knows the seller type in which case all payments should be made contingent on additional forest conservation. When the buyer does not know the seller type, a first-best self-enforcing contract can be implemented if forest conservation is sufficiently productive. If the gains from forest conservation are small, self-enforcing contracts may induce some carbon sequestration by some or all seller types, depending on the value of the shared gains of the relationship.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2013/06/17919070/addressing-additionality-redd-contracts-formal-enforcement-absent
dc.identifierhttps://hdl.handle.net/10986/15861
dc.identifierhttps://doi.org/10.1596/1813-9450-6502
dc.identifier.urihttp://hdl.handle.net/123456789/412189
dc.languageEnglish
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 6502
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectAFFORESTATION
dc.subjectAFFORESTATION PROJECTS
dc.subjectAGRICULTURE
dc.subjectALLOCATION OF LAND
dc.subjectASYMMETRIC INFORMATION
dc.subjectATMOSPHERE
dc.subjectBILATERAL CONTRACTS
dc.subjectBIODIVERSITY
dc.subjectBIODIVERSITY CONSERVATION
dc.subjectBREACH
dc.subjectCARBON
dc.subjectCARBON CREDITS
dc.subjectCARBON EMISSION
dc.subjectCARBON EMISSIONS
dc.subjectCARBON EMISSIONS FROM DEFORESTATION
dc.subjectCARBON OFFSET
dc.subjectCARBON OFFSETS
dc.subjectCARBON SEQUESTRATION
dc.subjectCARBON SINKS
dc.subjectCARBON STOCKS
dc.subjectCARBON-SEQUESTRATION
dc.subjectCENTER FOR INTERNATIONAL FORESTRY RESEARCH
dc.subjectCLIMATE
dc.subjectCLIMATE CHANGE
dc.subjectCO
dc.subjectCOMPENSATION
dc.subjectCONTRACT DESIGN
dc.subjectCONTRACT ENFORCEMENT
dc.subjectCONTRACT OBLIGATIONS
dc.subjectCONTRACT OFFERS
dc.subjectCONTRACT THEORY
dc.subjectCOOPERATIVE EQUILIBRIUM
dc.subjectDEVELOPING COUNTRIES
dc.subjectECONOMIC DEVELOPMENT
dc.subjectENFORCEABILITY
dc.subjectENFORCEMENT CONSTRAINT
dc.subjectENFORCEMENT MECHANISMS
dc.subjectENVIRONMENTS
dc.subjectEQUILIBRIUM
dc.subjectEXPENDITURES
dc.subjectFEASIBLE CONTRACTS
dc.subjectFINANCIAL SUPPORT
dc.subjectFOREST
dc.subjectFOREST ACTIVITIES
dc.subjectFOREST ACTIVITY
dc.subjectFOREST CARBON
dc.subjectFOREST CARBON SINKS
dc.subjectFOREST CONSERVATION
dc.subjectFOREST DEGRADATION
dc.subjectFOREST LAND
dc.subjectFOREST PROTECTION
dc.subjectFORESTRY
dc.subjectFORESTS
dc.subjectFRAMEWORK CONVENTION ON CLIMATE CHANGE
dc.subjectGHG
dc.subjectGLOBAL CLIMATE CHANGE
dc.subjectGOOD FAITH
dc.subjectGREENHOUSE
dc.subjectGREENHOUSE GAS
dc.subjectGREENHOUSE GAS MITIGATION
dc.subjectGREENHOUSE-GAS
dc.subjectGREENHOUSE-GAS EMISSIONS
dc.subjectGROVES
dc.subjectHETEROGENEITY
dc.subjectHIDDEN INFORMATION
dc.subjectHOLDING
dc.subjectINCENTIVE COMPATIBILITY CONSTRAINT
dc.subjectINCENTIVE COMPATIBILITY CONSTRAINTS
dc.subjectINCOMPLETE CONTRACT
dc.subjectINCOMPLETE CONTRACTS
dc.subjectINDIVIDUAL RATIONALITY CONSTRAINT
dc.subjectINFORMATION ASYMMETRIES
dc.subjectINFORMATION ASYMMETRY
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL FORESTRY RESEARCH
dc.subjectLAND USE
dc.subjectLAND USES
dc.subjectLAND-USE
dc.subjectLANDHOLDER
dc.subjectLANDHOLDERS
dc.subjectLANDOWNER
dc.subjectLANDOWNERS
dc.subjectLEGAL SYSTEMS
dc.subjectLEGALLY BINDING OBLIGATION
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectLITERATURE ON CONTRACT
dc.subjectMORAL HAZARD
dc.subjectOPEN ACCESS
dc.subjectOPPORTUNITY COST
dc.subjectOPPORTUNITY COSTS
dc.subjectOPTIMAL CONTRACT
dc.subjectOPTIMAL CONTRACTS
dc.subjectPARTICIPATION CONSTRAINT
dc.subjectPH
dc.subjectPP
dc.subjectPRIVATE ENFORCEMENT
dc.subjectPROOF OF PROPOSITION
dc.subjectREASONABLE COST
dc.subjectRELATIONAL CONTRACT
dc.subjectRELATIONAL CONTRACTS
dc.subjectRENEGOTIATION
dc.subjectRETURN
dc.subjectRETURNS
dc.subjectRISK AVERSION
dc.subjectRISK-NEUTRAL
dc.subjectSELLER
dc.subjectSELLERS
dc.subjectTIMBER
dc.subjectTIMBER HARVESTING
dc.subjectTRADING
dc.subjectTRUST FUND
dc.subjectWOOD
dc.titleAddressing Additionality in REDD Contracts When Formal Enforcement Is Absent

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