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Structuring Economic Incentives to Reduce Emissions from Deforestation Within Indonesia

Joint Bank-Fund Brown-Bag Research Seminars on Environment and Energy

Jonah Busch, Ruben N. Lubowski, Fabiano Godoy, Marc Steininger, Arief A. Yusuf, Kemen Austin, Jenny Hewson, Daniel Juhn, Muhammad Farid, and Frederick Boltz:

Structuring Economic Incentives to Reduce Emissions from Deforestation Within Indonesia

Presented by Jonah Busch

Wednesday, February 22, 2012
 12.30-2:00 pm
Venue: MC6-598

We estimate and map the impacts that alternative national and subnational economic incentive structures for reducing emissions from deforestation (REDD+) in Indonesia would have had on greenhouse gas emissions and national and local revenue if they had been in place from 2000 to 2005. The impact of carbon payments on deforestation is calibrated econometrically from the pattern of observed deforestation and spatial variation in the benefits and costs of converting land to agriculture over that time period. We find that well-structured voluntary incentives for REDD+ could reduce emissions and generate central revenue nearly as effectively as a cap-and-trade program by: paying for net emission reductions at the scale of an entire district rather than site-by-site; paying for reductions relative to reference levels that match business-as-usual levels; sharing a portion of district-level revenues with the national government; and sharing a portion of the national government’s responsibility for costs with districts.

Bio, Jonah Busch
Jonah Busch is the Climate and Forest Economist at Conservation International.  Busch is the lead author and developer of OSIRIS--a suite of free, online, open-source, spreadsheet-based decision support tools for estimating and mapping the climate, forest and revenue benefits of alternative policy decisions for reducing emissions from deforestation and forest degradation (REDD+).  He has advised on REDD+ for the President of Guyana, Norway, Indonesia, Suriname, the United Kingdom, and the Global Environment Facility. Jonah Busch holds a Ph.D. in Economics and Environmental Science from the University of California, Santa Barbara. Prior to graduate studies he taught high school math in Burkina Faso, as a Peace Corps volunteer.

For further information on the presentation, contact Jon Strand at:, 202-458-5122

The Joint Bank-Fund Brown-Bag Research Seminars on Environment and Energy is a joint initiative between the Development Research Group, Environment and Energy Team (DECEE), World Bank, and the Fiscal Affairs Department, IMF. Organizers of the series are Jon Strand (DECEE), and Ruud de Mooij and Ian Parry (FAD/IMF). The seminars are held at lunch time, normally once every two weeks, alternately in the Bank and Fund. Aims of the seminars are to raise attention to, and interest in, environment, energy and natural resources issues in both institutions; to promote the interaction between the two institutions in these fields; and to improve the institutions' common work on policy.

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