Resource information
Implementation arrangements for Reducing
Greenhouse Gas Emissions from Deforestation and Forest
Degradation can be seen as contracts that could address some
of the inherent problems with forest carbon credits that
often lead to high transaction costs -- measuring,
monitoring, and verification. Self-enforcing contracts,
where it is in the best interest of the environmental
service providers to comply with the contracts, may be one
way to reduce these costs if providers have incentives to
uphold their end of the contract. While the literature on
Reducing Greenhouse Gas Emissions from Deforestation and
Forest Degradation is extensive, there is little information
available to guide policy makers or investors on what form
such contracts should take. After providing an overview of
the current status of Reducing Greenhouse Gas Emissions from
Deforestation and Forest Degradation and its role as a tool
for reducing carbon emissions on an international scale, the
paper describes key issues regarding implementation and
reviews the literature on contracts from the related area of
Payments for Ecosystem Services programs, which face similar
challenges. The remainder of the paper reviews various
contractual mechanisms from agricultural and forestry
related projects that have been proposed or are being used
in practice and discusses the various implications
associated with their design and implementation.
