Challenges of Opportunity Cost Analysis in Planning REDD+: A Honduran Case Study of Social and Cultural Values Associated with Indigenous Forest Uses

Spencer T Plumb,Yeon-Su Kim,Erik A Nielsen

doi:10.3390/f3020244

Abstract

The REDD Programme is predicated on the assumption that developed countries will provide sufficient funds to offset opportunity costs associated with avoiding deforestation. The role of non-market values in indigenous land management may challenge the efficacy of compensation schemes targeted at meeting opportunity costs as calculated in traditional opportunity cost analysis (OCA). Furthermore it is unclear how these economic incentives might affect social and cultural values linked to land-use norms, livelihoods, and local governance. This study explores the economic, social and cultural values of forest uses for a Miskito community in the Rio Plátano Biosphere Reserve in Honduras. Data were collected using household surveys, farm visits, and community workshops. OCA indicates potential for successful REDD+ payment schemes; however it is an inadequate method to account for subsistence and cultural opportunity costs associated with avoided deforestation. Compensation to change land-use practices may undermine governance institutions necessary to address deforestation in the region. Our results indicate that small-scale agriculture and other forest-based subsistence activities are important cultural practices for maintaining Miskito identity and forest management institutions. Recommendations are offered for using OCA to develop REDD+ projects that recognize the linkages between social and cultural values and forest management by focusing on approaches that consider a full range of economic, social and cultural opportunity costs.

Highlights

Emissions from deforestation account for up to 17% of global greenhouse gas emissions, the majority of which come from tropical deforestation [1]
The use of opportunity cost analysis (OCA) in REDD+ project planning and design establishes the opportunity costs (OC) necessary to compensate land-users for foregoing deforestation, but it assumes that land users focus on maximizing short-term profit
Not all land use change behavior is economically driven and not all land use values can be calculated in monetary terms

Summary

Introduction

Emissions from deforestation account for up to 17% of global greenhouse gas emissions, the majority of which come from tropical deforestation [1]. REDD+ is likely to be structured using Payment for Ecosystem Services (PES) as the principle economic component of the carbon offset mechanism. The PES mechanism proposed for REDD+ is designed to transfer funds from developed countries to pay land managers in developing tropical countries to reduce emissions from deforestation. The most significant portion of REDD+ payments will likely be spent meeting the opportunity costs (OC) associated with deforestation. OC are defined as the foregone, net benefits that would be derived from deforestation, e.g., timber, plus the net benefits of the subsequent alternative land use, e.g., cattle ranching [2]. If REDD+ payments to land users are sufficient to cover the rents derived from alternative land uses, land users seeking to maximize profit would be incentivized to alter their behavior and forego cutting down their forest.

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