Getting REDDy: Understanding and Improving Domestic Policy Impacts on Forest Loss

Many constraints upon REDD policies’ ability to reduce forest loss are common across settings, inherent in the fact that agents making key choices respond also to other factors that influence the overall incentive to clear or to degrade a forest instead of conserving it. The record is mixed, at best, with regard to past public interventions to reduce forest loss, signaling the need to disseminate and to improve conceptual models of policy responses. We summarize 3 distinct models employed by economists to assess policy effectiveness: (1) producer profit maximization in choosing spatial extent and distribution of land uses, given complete markets; (2) rural household optimization given both incomplete markets and varied household assets and tastes; and (3) public optimization within interconnected choices about concessions, corruption and decentralization, all important for degradation (‘D ’ in REDD). Each model’s perspective on impact leads to a review of the evidence. We consider the impacts of forest-conservation and forest-relevant-development policies for the settings and decisions, and at the scales, for which each of the models best applies. Theory and evidence suggest options to increase the impacts of domestic REDD policies.