REDD sticks and carrots in the Brazilian Amazon: Assessing costs and livelihood implications

Despite recent reductions, Brazil remains among the top deforesting countries in the world, and is thus one of the countries where ‘Reducing Emissions from Deforestation and Forest Degradation' (REDD) initiatives could potentially have the most tangible returns for climate change mitigation. Economic incentives, such as payments for environmental services (PES) represent one option to induce forestland stewards under appropriate property right regimes to conserve more forests. Yet, for the large part of Amazon deforestation that occurs on nondesignated public lands (terra devoluta) as well as on poorly delimited private land, PES will not be viable in the short and medium term. REDD will thus also require other tools, notably improved command-and-control disincentives that enforce existing forest laws more rigorously. While quite a number of studies have addressed the potential costs of using PES as a REDD vehicle, cost estimates of control-based REDD strategies are speculative at best. In this study, we develop a conceptual framework and a spatially explicit model to analyse regulatory enforcement in the context of the Brazilian Amazon. We validate the model's performance based on historical deforestation and enforcement mission data covering the years 2002-9. Based on an optimal enforcement scenario we analyse the costs of liability establishment and legal coercion for alternative REDD targets and evaluate local welfare impacts in terms of land users' opportunity costs or fine obligations depending on local compliance.