NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation

Seema Jayachandran, Joost de Laat, Eric F. Lambin, Charlotte Y. Stanton

NBER Working Paper No. 22378
Issued in June 2016
NBER Program(s):Development Economics, Environment and Energy Economics

This paper evaluates a Payments for Ecosystem Services (PES) program in western Uganda that offered forest-owning households cash payments if they conserved their forest. The program was implemented as a randomized trial in 121 villages, 60 of which received the program for two years. The PES program reduced deforestation and forest degradation: Tree cover, measured using high-resolution satellite imagery, declined by 2% to 5% in treatment villages compared to 7% to 10% in control villages during the study period. We find no evidence of shifting of tree-cutting to nearby land. We then use the estimated effect size and the "social cost of carbon" to value the delayed carbon dioxide emissions, and compare this benefit to the program's cost.

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Document Object Identifier (DOI): 10.3386/w22378

Published: Seema Jayachandran & Joost de Laat & Eric F. Lambin & Charlotte Y. Stanton & Robin Audy & Nancy E. Thomas, 2017. "Cash for carbon: A randomized trial of payments for ecosystem services to reduce deforestation," Science, vol 357(6348), pages 267-273.

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