Economics of reducing emissions from deforestation and forest degradation: incentives to change forest use behavior

Because deforestation and forest degradation cause greenhouse gas emissions, the United Nations’ strategy to mitigate climate change now includes mechanisms for payments to reduce emissions from deforestation and forest degradation (REDD) in climate treaties. REDD brings lower income countries that cannot completely stem forest loss into international climate policies when those countries can reduce their rates of forest-based emissions and avoid some forest losses. From an economics perspective, REDD works through changing incentives for forest use. This entry describes REDD’s history and financing; discusses the implementation of REDD; employs the lens of economic incentives to explore the potential for, and underappreciated costs in, REDD; describes the current status of REDD implementation and future directions; and concludes