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June 29, 2010
In this brief and the associated paper on which it is based, we question whether the opportunity cost approach used in many of the major global climate change studies provides realistic cost estimates for use in designing REDD+ programs.
Opportunity cost provides a theoretically satisfactory indicator of what will be needed in a well-functioning, competitive market economy to entice entities that intend to deforest to reverse their decisions.4 However, there are major contextual issues influencing the adequacy and appropriateness of opportunity cost estimates in developing REDD+ program strategy and design. Without factoring in the costs and time involved in resolving these issues, we could be underestimating the real costs and misguiding the debate and design of REDD+ programs. The contextual issues relate to the institutional and market dimensions of REDD+: the costs associated with establishing good governance , which means controlling corruption and illegal activity, increasing transparency and accountability, resolving basic property and use rights issues, getting adequate technical and financial capacity, figuring ways to avoid leakages and “environmental blackmail.”
Access the full report from the Rights and Resources Initiative website here.
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