North/South Contractual Design Through the REDD&amp;#43; Scheme

Chiroleu‐Assouline, Mireille; Poudou, Jean-Christophe; Roussel, Sébastien

doi:10.2139/ssrn.2192032

Cited by 7 publications

(4 citation statements)

References 25 publications

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“…The leakage and the associated externality between the districts weaken the e¤ectiveness, and in ‡uence the design of conservation contracts. We thus diverge from the growing literature on how to design agreements for PES (Engel et al, 2008) or REDD (Kerr, 2013), which tends to focus on textbook contract-theoretic problems such as moral hazard (Gjertsen et al, 2010), private information (Chiroleu-Assouline et al, 2012;Mason, 2013;Mason and Plantinga, 2013), or observability (Delacote and Simonet, 2013). 13 Instead, the analysis in our paper is more related to the literature on contracts in the presence of externalities.…”

Section: Introductionmentioning

confidence: 94%

Conservation Contracts and Political Regimes

Harstad

Mideksa

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Conservation Contracts and Political Regimes AbstractMotivated by tropical deforestation, we analyze (i) a novel theory of resource extraction, (ii) the optimal conservation contract, (iii) when the donor prefers contracting with central rather than local governments, and (iv) how the donor's presence may induce institutional change. Deforestation can be legal or illegal in the model: each district decides how much to protect and how much to extract for sale on a common market. If districts are strong, in that they find protection inexpensive, extraction is sales-driven and districts bene.t if neighbors conserve. If districts are weak, they lose when neighbors conserve since the smaller supply increases the price and the pressure on the resource, and thus also the cost of protection. Consequently, decentralizing authority increases conservation if and only if districts are weak. Contracting with the central authority is socially optimal, but, on the one hand, the donor benefits from contracting with districts if they are weak; on the other hand, districts prefer to decentralize if they are strong. The presence of the donor may lead to a regime change that increases extraction by more than it is reduced by the contract itself.JEL-Code: Q340.

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Section: Introductionmentioning

confidence: 94%

Conservation Contracts and Political Regimes

Harstad

Mideksa

2015

SSRN Journal

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“…See, for example, Burgess et al (2012), Amacher et al (2007Amacher et al ( , 2012, Mendelsohn (1994), Angelsen and Kaimowitz (1999), and the references therein. Furthermore, our focus on institutional change is different from the focus in the papers on REDDþ, which emphasize moral hazard (Gjertsen et al 2021), private information (Chiroleu-Assouline et al 2012;Mason and Plantinga 2013;Mason 2018), observability (Delacote and Simonet 2013), or political economics (Harstad 2022).…”

Section: Outlinementioning

confidence: 99%

Contracts and Induced Institutional Change

Harstad,

Mideksa

2022

The Journal of Law, Economics, and Organization

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We study agents’ incentives to form horizontal coalitions before a principal offers vertical contracts. When a vertical contract generates negative externalities on other agents, the agents may collude in order to obtain better deals; when one contract benefits other agents, the agents may decentralize, instead. Contractually induced institutional changes always harm the principal and the negative effect can outweigh the direct effects of the contracts, making the contracts counterproductive. The model is tractable and sufficiently flexible to be relevant for applications such as regulation of pollution, payments for forest conservation, and mergers between firms in a supplier–franchisee relationship. (JEL D86, H23, H87, Q58).

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“…In Chiroleu-Assouline et al [2013] the REDD mechanism is modelled as a principal-agent problem. The principal (a developed country or a supranational funding institution) wants to reduce deforestation in order to mitigate climate change and is ready to transfer money to forest-owners.…”

Section: Other Game-theoretic Modelsmentioning

confidence: 99%

Financing the Reduction of Emissions from Deforestation: A Differential Game Approach

Riesner

Tragler

2015

Large-Scale Scientific Computing

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This thesis analyzes and compares two versions of a mechanism that aims at mitigating climate change through reducing emissions from rainforest-deforestation. In this mechanism, industrialized countries pay compensations to countries with rainforests if they reduce their deforestation, because it is more cost-efficient than restricting domestic production. The initial question is, which funding possibility yields the best environmental results and is most beneficial for the involved parties. Furthermore, two critical issues of the mechanism are addressed more closely in both scenarios. For this purpose, differential games are developed, in which industrialized countries and countries with rainforests denote the two players. Solutions are obtained by applying Pontryagin's Maximum Principle and the concepts of Nash or Stackelberg Equilibria. Due to the model assumptions, analytical solutions can be found for most of the considered games. It turns out that both versions of the mechanism can be a valuable contribution in the battle against climate change. Moreover, most advantages and disadvantages of the two variants turn out to be robust with respect to parameter changes and small modifications of the model. 'Reducing deforestation is the single largest opportunity for cost-effective and immediate reductions of carbon emissions.'This potential was already seen in the negotiations that led to the Kyoto Protocol in 1997. But no agreement on the precise design could be found and only afforestation became eligible under the Clean Development Mechanism.

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North/South Contractual Design Through the REDD+ Scheme

Cited by 7 publications

References 25 publications

Conservation Contracts and Political Regimes

Conservation Contracts and Political Regimes

Contracts and Induced Institutional Change

Financing the Reduction of Emissions from Deforestation: A Differential Game Approach

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