North/South contractual design through the REDD+ scheme

Arbeitspapier

In this paper we aim at theoretically grounding the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme as a contractual relationship between countries in the light of the theory of incentives. Considering incomplete information about reference levels of deforestation as well as exogenous implementation and transaction costs, we compare two types of contracts: a deforestation performance-based contract and a conditional avoided deforestation-based contract. Because of the implementation and transaction costs, each kind of REDD+ contract implies a dramatically different information rent/efficiency trade-off. If the contract is performance-based (resp. conditionality-based), information rents are awarded to countries with the ex ante lowest (resp. highest) deforestation. In a simple quadratic setting, there is a reference level threshold in terms of efficiency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 89.2012

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products ; Renewable Resources and Conservation: Forestry ; Climate; Natural Disasters and Their Management; Global Warming
• Subject: Conditionality ; Contract ; Deforestation ; Hidden Information ; Incentives ; Performance ; Reducing Emissions from Deforestation and Forest Degradation + (REDD+) ; Abholzung ; Klimaschutz ; Internationale Umweltpolitik ; Nord-Süd-Beziehungen ; Prinzipal-Agent-Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chiroleu-Assouline, Mireille ; Poudou, Jean-Christophe ; Roussel, Sébastien
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/72990
• Last update: 10.03.2025, 11:43 AM CET