Allocating Group-Level Payments for Ecosystem Services: Experiences from a REDD+ Pilot in Tanzania

Abstract

Payments for ecosystem services (PES) typically reward landowners for managing their land to provide ecosystem services that would not otherwise be provided. REDD+-Reduced Emissions from Deforestation and Forest Degradation-is a form of PES aimed at decreasing carbon emissions from forest conversion and extraction in lower-income countries. A key challenge for REDD+ occurs when it is implemented at a group, rather than an individual landowner, level. Whilst achieving a group-level reduction relies on individuals changing their interaction with the forest, incentives are not aligned explicitly at the individual level. Rather, payments are made to a defined group as a single entity in exchange for verified reduced forest loss, as per a PES scheme. In this paper, we explore how REDD+ has been implemented in one multiple-village pilot in Tanzania with the village defining the group. Our findings suggest that considerable attention has been paid towards monitoring, reporting, verification (MRV), and equity. No explicit mechanism ensures individual compliance with the village-level PES, and few villages allocate funds for explicit enforcement efforts to protect the forest from illegal activities undertaken by individual group members or by outsiders. However, the development of village-level institutions, "social fencing," and a shared future through equal REDD+ payments, factor into decisions that influence the level of compliance at the village level that the program will eventually achieve.

The Economics of REDD through an Incidence of Burdens and Benefits Lens

“…Palmer (2010) writes explicitly of the need for the creation of "common property carbon rights", given how many REDD initiatives (and planned initiatives) are located in areas where forests are held under common property regimes. Robinson et al (2016) document a REDD pilot scheme in Tanzania implemented at the group level to mimic a PES in which payments should be conditional on carbon loss avoided and valued according to prices in the carbon markets. The payment is made to the community, reflecting the value of the avoided carbon emissions, and each member of the community receives an equal share of that payment, regardless of the costs that REDD imposes on that particular individual and on that individual's reduction of forest use.…”

“…However, they also found that upfront and opportunity costs were night compared to the PES payments. Mahanty et al (2013) document various modalities for how PES funds are distributed within communities, from collective contracts, similar to Robinson et al (2016) example from Tanzania, through to payments to individual contract owners and to community trust funds.…”

What does it take to institute REDD +? An analysis of the Kilosa REDD + pilot, Tanzania

“…The level of total payments to each village was 'mimicking' a performance-based system where the volumes of carbon stored were estimated based on the size of REDD+ forests and how well villages followed up on by-laws (see also Robinson et al 2016). While the money for payments came from project funds, TFCG and MJUMITA used the carbon market price when paying since they planned for future financial resources to come from the market (Meshack pers.…”

Social impacts of climate change mitigation policies and their implications for inequality

“…However, the risk of negative social and distributional outcomes is high in contexts with high levels of poverty, corruption or economic and existing inequalities (e.g. Cai, Mu, & Chen, 2014;Hunsberger, Bolwig, Corbera, & Creutzig, 2014;Larson et al, 2015;Petrini et al, 2017;Robinson et al, 2016;Westholm, 2016), and where no action (or limited action) is taken to identify and mitigate potentially adverse side-effects. In such contexts, inclusive design and implementation is particularly important but not always possible.…”

“…Negative equality outcomes because of inequitable access have been reported in relation to renewable electricity programmes (e.g. Mazorra et al, 2017;Shoaiba & Ariaratnam, 2016;Yaqoot, Diwan, & Kandpal, 2016), forest protection initiatives (Bhatta et al, 2008;Robinson, Albers, Lokina, & Meshack, 2016) and biofuel cultivation (Ekener-Petersen et al, 2014;Garvey & Barreto, 2016). However, mitigating strategies such as subsidies, exemptions and various types of revenue recycling mechanisms can often be utilized effectively to prevent or minimize adverse economic outcomes.…”