Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation

65 Pages Posted: 7 Jul 2016 Last revised: 23 Feb 2023

See all articles by Seema Jayachandran

Seema Jayachandran

Northwestern University - Department of Economics

Joost de Laat

The World Bank - Strategic Impact Evaluation Fund (SIEF)

Eric F. Lambin

Catholic University of Louvain (UCL)

Charlotte Stanton

Carnegie Institution for Science

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Date Written: June 2016

Abstract

This paper evaluates a Payments for Ecosystem Services (PES) program in western Uganda that offered forest-owning households cash payments if they conserved their forest. The program was implemented as a randomized trial in 121 villages, 60 of which received the program for two years. The PES program reduced deforestation and forest degradation: Tree cover, measured using high-resolution satellite imagery, declined by 2% to 5% in treatment villages compared to 7% to 10% in control villages during the study period. We find no evidence of shifting of tree-cutting to nearby land. We then use the estimated effect size and the "social cost of carbon" to value the delayed carbon dioxide emissions, and compare this benefit to the program's cost.

Suggested Citation

Jayachandran, Seema and de Laat, Joost and Lambin, Eric F. and Stanton, Charlotte, Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation (June 2016). NBER Working Paper No. w22378, Available at SSRN: https://ssrn.com/abstract=2804402

Seema Jayachandran (Contact Author)

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

Joost De Laat

The World Bank - Strategic Impact Evaluation Fund (SIEF) ( email )

United States

HOME PAGE: http://www.worldbank.org/sief

Eric F. Lambin

Catholic University of Louvain (UCL)

Place Montesquieu, 3
B-1348 Louvain-la-Neuve, 1348
Belgium

Charlotte Stanton

Carnegie Institution for Science

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