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Biological Conservation 154 (2012) 4252

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Biological Conservation
journal homepage: www.elsevier.com/locate/biocon

Special Issue Article: REDD+ and conservation

REDD+ and rural livelihoods


Ben Groom a, Charles Palmer b,
a
b

Department of Economics, School of Oriental and African Studies, Russell Square, London WC1H 0XG, United Kingdom
Department of Geography and Environment, London School of Economics and Political Science, Houghton Street, London WC2A 2AE, United Kingdom

a r t i c l e

i n f o

Article history:
Available online 28 April 2012
Keywords:
Constraints
Livelihoods
PES
Poverty
REDD+

a b s t r a c t
Focusing on incentive schemes that induce participation in land-use activities to supply environmental
services, this paper examines the potential impacts of REDD+ on livelihoods, in particular with respect
to incomes and poverty alleviation. Two case studies, each at a different scale, are presented. First, the
Nhambita Community Carbon Project in Mozambique, a REDD+ project, promoted agro-forestry and
reforestation activities along with alternative livelihoods. Second, the Sloping Lands Conversion Programme (SLCP) in China is a national-level reforestation scheme to supply watershed services. Impacts
on the poor are addressed through the lens of a rural household allocating its labour supply to different
income sources. Four aspects of REDD+ policy are discussed: the incentives necessary for ensuring the
cost-effective, long-run sustainability of both carbon sinks and incomes; the implications for forest conservation, in particular biodiversity; the need for scaling up carbon sequestration activities in order to
minimise carbon leakage; and, the possibilities to maximise the participation of the poor and alleviate
poverty. Finally, the paper highlights the importance of using appropriate methodologies for correct evaluation of policy impacts on incomes.
2012 Elsevier Ltd. All rights reserved.

1. Introduction
With tropical deforestation accounting for up to a fth of global,
anthropogenic carbon dioxide emissions, the storage of this gas is
probably the most valuable non-market benet associated with
tropical forest conservation. Reducing Emissions from Deforestation and Degradation REDD+ is dened as a set of policies
and activities implemented to prevent or slow deforestation and
degradation, and increase forest carbon stocks. Such policies and
activities, including both those inside and outside the UNFCCC1
process, target the climate benets of forests that are located in
some of the worlds poorest countries. Up to 800 million people
worldwide are dependent on forests for their livelihoods (Chomitz
et al., 2006; World Resources Institute, 2005). Stakeholders, ranging
from governments to NGOs, have called for poverty reduction to be
incorporated as a co-benet of REDD+ policy (see Brown et al.,
2009).

Corresponding author. Tel.: +44 (0)20 7107 5093; fax: +44 (0)20 7955 7412.
E-mail addresses: bg3@soas.ac.uk (B. Groom), c.palmer1@lse.ac.uk (C. Palmer).
1
United Nations Framework Convention on Climate Change. At the Conference to
the Parties held in Cancun in 2010, an agreement was reached to include REDD+ in
the international architecture of the UNFCCC, covering REDD, conservation and
enhancement of carbon stocks and sustainable management of forest (Conference of
the Parties, 2011). In addition both the World Bank and the UN have established
programmes to move countries toward REDD+ readiness in the form of the Forest
Carbon Partnership Facility and UN-REDD, respectively.
0006-3207/$ - see front matter 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.biocon.2012.03.002

Focusing primarily on activities that increase carbon stocks,


specically agro-forestry and reforestation, this paper examines
the potential of REDD+ to improve rural livelihoods while supplying a source of long-term, cost-effective emissions reductions.2 We
dene livelihoods to be employment, incomes, and consumption
that have some degree of forest resource dependence (Salafsky and
Wollenberg, 2000). Guided by this relatively narrow denition, we
derive insights for REDD+ policy from empirical research undertaken
on two Payments for Environmental Services (PES) schemes,3 via the
lens of a rural household allocating its labour supply to different income sources. These schemes attempted to incentivise more socially
desirable land-use changes among poor farmers and households,
specically to supply carbon and watershed services in Mozambique
and China, respectively. Both schemes aimed not only to induce
environmental service provision but also to improve livelihoods
and reduce poverty. Our rationale for choosing these two cases is
rst, to extrapolate policy implications for REDD+ at both the project
and national scale and second, to allow for a comparison of different

2
Cost-effectiveness has been used as a strong argument for including REDD+ as a
mitigation strategy for reducing greenhouse gas emissions in a global climate
agreement (Eliasch, 2008; Palmer and Engel, 2009; Stern, 2008).
3
PES is perhaps the most widely discussed policy tool in the REDD+ literature (see
Angelsen, 2010; Palmer, 2011). We dene PES as a voluntary transaction between at
least one buyer and at least one seller in which payments are provided conditional on
the supply of a well-dened environmental service or a land use likely to secure that
service (Wunder, 2005). See Engel et al. (2008), Pattanayak et al. (2010), and Wunder
et al. (2008) for useful recent reviews.

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

methodologies that could be employed to assess the impacts on the


incomes of the poor.
Backed by EU funds and pro-active support from a variety of
private and public sector institutions, the Nhambita Community
Carbon Project in Mozambique promoted carbon sequestration
activities along with alternative livelihoods in the form of wage labour and microenterprises. It has already produced carbon offsets,
which were sold in voluntary carbon markets in the form of Veried Emissions Reductions (VERs). The project has expanded since
its inception in 2003 and has further plans for scaling up.
The Nhambita project is one of numerous REDD+ pilot projects
that have been established worldwide (see Sills et al., 2009, for a
review). While uncertainty remains about the precise form of the
future REDD+ regime(s), project-scale activities to increase terrestrial carbon stocks are likely to be managed via national-level policy frameworks (Palmer, 2011; Wertz-Kanounnikoff and Angelsen,
2009). Such frameworks have begun to emerge, for example, in
Guyana, although it has no national-level PES scheme at the current time.4 Thus, future REDD+ regime(s) may not lean towards
the standalone, project-based approach of Nhambita nor follow that
of the Kyoto Protocols Clean Development Mechanism (CDM).5
Chinas Sloping Lands Conversion Programme (SLCP), which began in 1999, is the biggest, national-level PES scheme in the world.
Despite being employed for the provision of watershed services, it
has useful lessons for the design of national-level REDD+ schemes.
In particular, it illustrates the difculties of scaling up incentive
schemes to the national level and the challenges of pro-poor PES
targeting. Also, comprehensive household-level data on activities
and incomes enables a deeper level of analysis on household decision-making over the allocation of labour in contrast to the Nhambita case. Here, programme evaluation methods such as matching
and differences in differences allow more plausible estimates of
the causal nature of the PES scheme to be identied.
This paper joins a growing body of research about the possible
impacts of REDD+ on rural livelihoods. Acknowledging the need for
more time before the impacts of pilot projects and initiatives can
be properly evaluated, this research tends to focus on the livelihoods impacts from established incentive schemes and carbon projects. For example, in their review, Springate-Baginski and
Wollenberg (2010) nd that these tend not to benet the poor
and further marginalised some groups due to, for example, high
transaction costs of scheme implementation and weak land tenure.
Tacconi et al. (2010) nd similarly but also identify opportunities
for the poor including potential economic, social and environmental benets.
Our paper contributes to the literature as follows. First, it addresses incentives for ensuring the long-run sustainability of
REDD+ policy via economic analysis at the household level. Sustainability includes not only the maintenance of carbon sinks over
time (ensuring permanence) but also the maintenance of income
and welfare gains.6 This is particularly pertinent given uncertainty
about long-term nancing for REDD+. Second, we examine the rele4
Guyana participates in the World Bank Forest Carbon Partnership Facility (FCPF),
and signed a bilateral agreement with Norway to help fund the implementation of the
countrys Low Carbon Development Strategy, launched in 2009 (see Henders, 2010).
5
The Kyoto Protocol excluded the possibility of emissions reductions commitments in Annex I (i.e. advanced industrialised) countries being met by slowing
deforestation in tropical countries (see Fearnside, 2001). Yet, Kyotos CDM allows for
afforestation/reforestation (AR) projects that can be implemented by low-income
communities in developing countries. These are nanced by Annex I countries, which
are then be used to help meet their emissions reductions commitments. To date,
however, very few CDM projects are engaged in AR activities (Thomas et al., 2010).
Outside the CDM, a parallel market for voluntary CO2 emissions reductions has grown
rapidly in recent years, leading to the roll-out of projects in many countries, including
Mozambique and China.
6
For instance, CDM guidelines propose that Land Use, Land Use Change and
Forestry projects have duration of between 20 and 60 years.

43

vance of the studies for forest conservation in a REDD+ setting and


third, their relevance for scaling up REDD+, which is necessary to
minimise carbon leakage and reach broader climate policy goals. Finally, we examine the potential of pro-poor targeting under REDD+.
In the remainder of the paper, we rst present a framework for
assessing the impacts of REDD+ on the incomes of participants,
through the lens of a rural household allocating its labour supply
to different income sources. The two case studies are then presented in turn, in Section 3. Utilising different methodologies, these
studies are based on previous research and new empirical work
undertaken by the authors on the SLCP. The Mozambique case utilises a household dataset and secondary data and assesses income
impacts using simple statistics (Jindal, 2010) and simulations (Palmer and Silber, 2012). In the China case, a household dataset is
analysed using programme evaluation methods, which compare a
treatment group of payment recipients with an untreated group
to identify impacts (Groom, 2012). In Section 4, we discuss the relevance of the results from the two studies for REDD+ policy.

2. A framework for assessing the impact of REDD+ on poverty


The recent rapid emergence of PES schemes in developing countries across the world has also seen a growing body of research on
their impacts, including attempts to assess possible reductions in
poverty (e.g. see Bulte et al., 2008). We begin by introducing the
channels through which PES could inuence the incomes and welfare of the poor. Pagiola et al. (2005) examined the possible linkages between PES and poverty, drawing on experiences of waterbased PES schemes in Latin America. Unlike the two case studies
discussed in this paper, these schemes were implemented primarily to improve the efciency of natural resource management and
not to address poverty. They rst note that if payments are made to
land users, the distribution and ownership patterns of land is a
critical determinant of the poverty impact of PES schemes. Second,
participation is voluntary and participants receive payments for
doing so. This creates a prima facie presumption that participants
are at least no worse off than they would be without the PES
scheme. If this were not the case then they could simply decline
to participate.
To better understand the links between PES and poverty, Pagiola et al. (2005) ask three core questions. First, who are the actual
and potential participants in PES, and how many of them are poor?
Second, what are the obstacles to the poors participation in PES?
Third, what are the impacts of PES on participants?
The rst question breaks the participants down into upstream
service providers, downstream service users, and other groups.
The last group includes non-participants who may be affected by
land-use changes brought about by the scheme. Regarding the second question, obstacles to participation include: factors that affect
eligibility to participate, which depend on the schemes targeting;
factors that affect their desire to participate, e.g. expected protability of participation; and those that affect their ability to participate. Ability could be inuenced by tenure issues, investment
costs, and technical constraints on participation. Transaction costs
affect both the desire and ability to participate in PES. The third
question focuses not only on the income impacts of participation
in PES, most obviously relating to the payment itself, but also
non-income impacts such as those on local institutions responsible
for natural resource management.
We examine the impacts of PES on participants incomes in
Mozambique and China, respectively, thus primarily addressing
Pagiola et al.s (2005) third question. How households allocate labour provides the lens through which these impacts are analysed.
In a perfect economic setting in which labour can move freely, i.e.
via perfectly-functioning labour markets, households could be ex-

44

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

On-farm 1

On-farm 2

Off-farm

Fig. 1. Household labour allocation.

pected to voluntarily allocate their labour to activities or livelihoods that make them better off compared to the status quo (see
Fig. 1).
In both case studies, labour is allocated to one or more sources
of income. First, and in both studies, labour was allocated to agricultural production (on-farm 1). This is the baseline source of livelihoods, i.e. prior to the PES intervention. Thus, the majority of
participants were farmers with evidence of subsistence livelihoods
and very low incomes, often less than US$2 per day. With the intervention, another source of income was introduced on-farm (onfarm 2), which necessitated not only a reallocation of land that
may formerly have been used in agriculture but also a reallocation
of household labour. In Chinas SLCP, this involved reforestation
activities while Mozambiques project principally enabled agroforestry activities.
Labour was also supplied off-farm. For example in China,
households supplied labour to Town and Village Enterprises (TVEs)
and to the countrys rapidly-growing cities. Note that these sources
of labour demand did not necessarily arise through the SLCP intervention. In Mozambique, on the other hand, new sources of offfarm labour demand were created through the project itself, for
example, through microenterprises and support for project activities. In Pagiola et al. (2005), off-farm labour opportunities were
only discussed in the context of these providing a potential source
of capital to PES activities. As we show, this ignores the dynamics
of how households allocate their labour as a result of a PES intervention, with important implications for REDD+ policy design.
In general, policy interventions affect and therefore change how
households decide to allocate their labour in different ways
depending on the nature of the intervention. Incentives for supplying carbon services could be delivered through PES, although they
may alternatively be supplied more indirectly. Capital and labour
could be redirected away from activities that underlie deforestation such as certain types of agriculture, or commercial activities
that supply environmental services could be encouraged via joint
production (Ferraro and Kiss, 2002; Bulte and Engel, 2007).7 Examples of the former include agricultural intensication and the development of off-farm labour opportunities; the latter include
sustainable forestry (see Fisher et al., this issue), some non-timber
forest products, and eco-tourism.
Policy interventions in countries such as Mozambique and China typically operate in imperfect market and institutional settings,
and not in the simple setting illustrated in Fig. 1. For example, constraints may exist that prevent farmers from moving off-farm even
if they desired to do so. Other constraints such as credit rationing
and insecure tenure can also affect household decision making
over the allocation of labour and land, and tend to be widespread
in many developing countries (e.g. Ellis, 1998; de Janvry and Sadoulet, 2005). The poor tend to be most vulnerable to such con-

7
Such indirect incentives do not address the problem of missing markets for
services such as carbon in the manner of PES (see Bulte and Engel, 2007). Beyond
incentives, other REDD+ policy instruments range from command-and-control
policies, such as new protected areas or land zoning, through to other market-based
interventions, such as taxes (e.g. on forest products) (see Angelsen, 2009). Trade
instruments could also be used, e.g. timber export bans (Bulte and Engel, 2007).

straints. Policies which relax labour market constraints, e.g.


through facilitating or even directly providing employment offfarm, have been shown to reduce pressures on forests as well as reduce poverty, e.g. in Nepal (Bluffstone, 1995) and the Philippines
(Shively and Pagiola, 2004). In Pagiola et al. (2005), market and
institutional constraints were discussed in the context of the poors
ability to participate in PES schemes. Yet, such constraints can also
inuence the impacts on those who actually manage to participate
in PES, as we show in the following section.

3. The impacts of PES on incomes in Mozambique and China


3.1. Nhambita Community Carbon Project, Sofala, Mozambique
Located in the buffer zone of the Gorongosa National Park, the
Nhambita Community Carbon Project is a REDD+ pilot project that
was formally implemented in 2003 by the University of Edinburgh,
Envirotrade and the Edinburgh Centre for Carbon Management
(ECCM). During the projects pilot phase from 2003 to 2008, it
was funded by the EU. Thereafter, revenue was raised from the sale
of VERs to, e.g. MAN group. Since 2003, project activities have expanded over an area of almost 20,000 ha.
In following Plan Vivo management guidelines for the production of VERs, the project offered local farmers the choice of enrolling in one or more of seven agro-forestry/reforestation land-use
systems that utilise native species. As described by Palmer and Silber (2012), some systems focus on carbon sequestration while others combine sequestration with the cultivation of cash crops. Five
of the seven land-use options (two types of fruit orchard, woodlot/reforestation and two types of dispersed interplanting) involved the establishment of new plots on existing agricultural
land, known as machambas. Boundary planting involved the planting of trees around the boundaries of existing machambas. Under
the homestead planting option, trees were planted around the
house. Major species included mango and cashew, which under
the fruit orchard system, were planted for commercial sale.8 On
old machambas, miombo woodland was re-established under the
woodlot system. Under the agro-forestry system, nitrogen-xing
trees were interplanted on existing machambas, and either faidherbia
albidia or gliricidia sepium was planted. 9
The carbon sequestration service supplied by farmers, differentiated according to the land-use system(s) adopted, was remunerated in the form of annual PES funded through the sale of VERs
between 2005 and 2007.10 These payments are provided conditional
on provision of the carbon service over seven years.11 Some land-use
options also enabled potential long-term income derived from the
sale of cash crops, sustainably-harvested timber and non-timber forest products, once the carbon payments cease after year seven.
Approximately 7080% of the community of over 1000 households
was involved in project activities, in 2007 (University of Edinburgh,
2007). Households enrolled in one or more contracts, of 100-year
duration, and could engage with more than one land-use activity.
Each contract covers 0.251.50 hectares of machamba land (Jindal,
2008). Boundary planting was the most popular land-use system,
accounting for 56% of all contracts, followed by homestead planting
8
After 50 years, the harvest will decline, and the plot is supposed to be reestablished sequentially.
9
Gliricidia sepium is harvested every 30 years, while faidherbia albidia is only
thinned once after about 20 years and then grown to full maturity, which can take
more than 100 years. Dispersed interplanting, in principle, enables farmers to grow
on the same plot for a longer period.
10
Mean carbon payments to farmers were US$ 6.72 per tonne CO2, respectively US$
24.63 per tonne carbon (University of Edinburgh, 2008).
11
Carbon payments are withheld if, for example, farmers burn their machambas (see
Jindal, 2010).

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

(15%) and fruit orchards (14%). By 2008, about 1200 contracts were
in place covering 1000 ha.
Alongside carbon offsets produced from agro-forestry, we note
that offsets are also produced through community-level REDD
activities from miombo woodlands around Gorongosa (see Jindal,
2010). These woodlands were under threat from the expansion of
agriculture and charcoal production. Activities nanced by the sale
of offsets include re patrols. Remaining offset revenues were
deposited in a community trust fund, which has been used to construct schools and nance local healthcare provision. Additionally,
Jindal (2010) describes how the project promoted alternative livelihoods and incomes such as microenterprises including bee keeping, plant nurseries and a community sawmill. Local people have
also been hired directly by the project, e.g. as agro-forestry technicians and administrative staff. Since around 170 people have found
employment through the project, any assessment of project activities on the incomes of the poor rst needs to differentiate among
different sources of income created through the project, both onand off-farm.
3.1.1. Impacts of the Nhambita Community Carbon Project
All households within the community were eligible to participate in project activities, including the agro-forestry systems and
off-farm labour opportunities. As noted a clear majority of the
community did participate in the project in one form or another.
Regarding the former, households were selected on a rst-comerst-served basis. They were offered the choice of system(s) in
which to participate. Seedlings and training (e.g. on tree planting
and management) were provided for free by the project. People
were hired by the project or employed in microenterprises on
the basis of their skills and experience, and were mostly drawn
from the local community.
Quantitative household data were collected by Jindal (2010), in
2004 and 2008, to assess the impacts of the project on local livelihoods. In the 2008 survey, the local population was divided into
three strata, followed by random sampling (about 20%) of respondents within each stratum: (1) households participating in one or
more agro-forestry contracts and with at least one member employed in a microenterprise (n = 53); (2) households participating
in agro-forestry contracts only (n = 105); and (3) non-participating
households that neither participated in agro-forestry contracts nor
were employed in a microenterprise (n = 47). Note that Jindal
(2010) did not differentiate among households according to the seven land-use systems.
Jindal (2010) thus focused on two possible sources of household
income: annual carbon payments from participating in agro-forestry and monthly wages from participating in microenterprises.
Since many of the cash crop, timber and other non-timber benets
had yet to materialise these were not included in the income estimates of households participating in agro-forestry. One-way analysis of variance was performed by Jindal (2010) for cash incomes in
20072008 with the sample of households participating in agroforestry contracts and the sample of those with both contracts
and employment in microenterprises; each was compared to the
incomes of the non-participating sample.
The average annual cash income for households with both contracts and employment was signicantly higher (MZN 14,646) than
both non-participating households (MZN 1200) and those that
negotiated agro-forestry contracts alone (MZN 1435). Annual carbon payments in the agro-forestry contracts were equivalent to
about two months of wage labour. Thus, carbon payments appeared to play a relatively weak role in improving household incomes. Participants able to access wage labour created through
the project were much better off than those receiving even the
largest carbon payments. The impact of off-farm labour provision
reveals the possible existence of an off-farm labour constraint in

45

the study area. Jindal (2010) found that all employees of microenterprises sampled had agro-forestry contracts as well, which implies that the agro-forestry intervention may have helped people
move off-farm. Overall, he suggests that the project may have reduced local demand for wage labour, through the negative effect
of households reallocating land from food production to agro-forestry (thus reducing demand for seasonal wage labour) outweighing the positive effect of new jobs created through labour-intensive
agro-forestry. Reduced access to wage labour has been compensated, to some extent, by the carbon payments and the new offfarm labour opportunities created in the project.
Jindal (2010) observes that the increase in incomes may have
enabled more investment in agricultural inputs for the expansion
of non-project crops. Although the proportion of households growing such crops was much higher in 2008 than in 2004, the proportion among participating households was not noticeably higher
than among non-participants. Both participants and non-participants purchased food more often and were more likely to own livestock in 2008 compared with 2004. The number of income sources
remained unchanged between 2004 and 2008. Yet again for all
these indicators there is little difference between the participant
and non-participant groups. This could imply that the changes observed between 2004 and 2008 were unlikely to have been caused
by the project intervention.
However, without income data for 2004, it is neither possible to
gauge the precise impact of the project on changes in levels of
household income nor is it possible to analyse the shifts in income
according to income source between 2004 and 2008. But even at
the cross-sectional level, the participant sample, i.e. the treatment
group, and non-participant sample (untreated) are not directly
comparable due to sample selection: the treated and the untreated
differ in unobservable characteristics, which determine their outcomes. Using the same dataset as before Jindal (2010) found that
participant households were signicantly more likely to be larger,
have a female household head, have larger land endowments, and
have been resident in the area for longer compared with non-participants. He concluded that poorer, i.e. the female-headed households, and richer households, i.e. those with larger land
endowments, were equally likely to participate in the project.
Palmer and Silber (2012) assessed the role of both the carbon
payments and the potential returns from the production of cash
crops and timber in farmers incomes over the 100-year duration
of the project. They used secondary survey data collected during
project implementation, which were provided by the ECCM. These
consisted of technical specications of the different land-use systems, and included tree species and number, the quantities of
sequestered carbon,12 and the expected harvest of each land-use option as well as investment costs. Data for potential future harvests
and prices of cash crops were obtained from a variety of other secondary sources (see Palmer and Silber, 2012). The Net Present Value
(NPV) per hectare of each system was estimated by adding up the
benets (e.g. carbon payments), and subtracting the costs (e.g. establishment costs) before being discounted into a present value.
Uncertainty in future prices and harvests was addressed by Palmer and Silber (2012) using Monte Carlo simulations. They varied
ten input variables including the yields and prices for the cash
crops and timber but not the carbon price since this was xed
for the duration of the contract. All variables were varied according
to historical data trends and over 100,000 simulations, using latinhypercube sampling.

12
Data on carbon storage in biomass and products were derived from on a model
called CO2Fix-V3.1, which was originally developed by the Modelling Carbon
Sequestration in Forested Landscapes (CASFOR) project (see Schelhaas et al., 2004).
Parameters in the model include wood-carbon content, timber production, product
allocation for thinnings and expected lifetime of products.

46

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

Table 1
Key parameters of the seven land-use options: costs for establishment, total carbon payments, total revenues from the sale of cash crops, timber revenues, and NPV over
100 years: median values of Monte Carlo simulations with 95% condence intervals. Source: Palmer and Silber (2012).
Total costs for
establishment
(US$/ha)

Total carbon
payments
(US$/ha)

Total revenues
from sale of
cash crops over
100 years
(US$/ha)

Total
revenues
from
timber
over
100 years
(US$/ha)

Median NPV over


100 years (US$/ha)
(lower and upper
95% quantiles)

Cost benet ratio


(CBR) over 100 years

Boundary planting
Homestead planting
Fruit orchard (cashew)
Fruit orchard (mango)
Woodlot
Dispersed interplanting (gliricidia)
Dispersed interplanting (faidherbia)

260
1280
1280
1320
2820
395
395

270
880
783
653
1047
209
668

0
51,541
31,728
97,125
0
0
0

1142
175
232
198
1035
653
218

2 ( 100 to 113)
2004 (305 to 7640)
903 ( 224 to 4441)
4065 (714 to 16,150)
1678 ( 2691 to 776)
130 ( 251 to 2)
217 (78 to 385)

0.982
2.570
1.717
4.166
0.346
0.567
1.683

5000

boundary planting
homestead planting
fruit orchard (cashew)
fruit orchard (mango)
woodlot
dispersed interplanting (glir.)
dispersed interplanting (fai.)

-5000

NPV [US$/ha]

15000

Land use system

10

20

30

40

50

Mean C sequestration over 100 years [tC/ha]


Fig. 2. Comparison of mean carbon sequestration potential (tC/ha) vs. NPV over
100 years after the establishment of the land-use systems in US$ per ha. Source:
Palmer and Silber (2012). Note: Error bars show 95% condence intervals.

Table 1 shows the data for the key parameters of the seven
land-use systems. Fig. 2 contrasts the mean quantity of carbon
sequestered per ha for each land-use system over a 100-year planning horizon and the median NPV per ha.
From Table 1 and Fig. 2, the fruit orchard options along with
homestead planting had the highest median NPV. Moreover, only
three land-use options had positive, lower-bound condence intervals. Reforestation (woodlot) had the lowest NPV despite comprising the largest carbon payment of all systems. This was due to high
costs of establishment and no additional income from cash-crop
production. Reforestation and dispersed interplanting (gliricidia)
both had negative, higher-bound condence intervals. As noted
boundary planting comprised 56% of all contracts in the project,
although it has a slightly negative NPV. Similar to homestead
planting, this system requires relatively little commitment on the
part of farmers due to the utilisation of land not previously used
for agriculture. Farming on other land can thus continue as before,
although there may have been a shift in the households labour
supply from agriculture to agro-forestry. Boundary planting also
potentially provides higher timber benets compared with most
of the other options (see Table 1).
Participation in the other land-use options was relatively low,
which may have been due to the need to adopt new land-use practices, e.g. for interplanting. Fruit orchards require constant crop
maintenance, investments in skills and other inputs, and a supporting infrastructure for getting products to market. Yet further
research is necessary to clarify the determinants of adoption of
the different land uses.

From Table 1 and Fig. 2, reforestation (woodlot) and homestead


planting had the highest carbon sequestration potential while the
latter along with the fruit orchard options have the best prospects
for improving incomes. Homestead planting is thus the land-use
option that could provide both relatively high levels of carbon
sequestration and benets to farmers, followed by the fruit orchard
options.
Where costs are immediate and benets accrue at some point in
the future, the discount rate applied by farmers to evaluate NPVs
will be a crucial determinant of viability. The discount rate typically reects the opportunity cost (outside options) of capital. Personal discount rates may also reect uncertainty about the future,
where discount rates increase with uncertainty. High discount
rates lead to low NPVs for typical investment projects, and the
same is true for the sequestration land uses analysed here. Indeed,
discount rates of around 2030% NPV lead to negative NPVs. Only
dispersed interplanting (faidherbia) demonstrated a positive NPV
at all discount rates considered (Palmer and Silber, 2012). With
increasing discount rates, short-term benets such as the carbon
payments had higher values than those that might be realised after
seven years. Yet the potential long-term benets from the sale of
cash crops remained attractive even for farmers with higher discount rates.
Palmer and Silber (2012) also explored the cost-effectiveness of
the different land systems by estimating the lowest break-even
carbon prices in order for NPV to remain non-negative. At relatively low discount rates, homestead planting, and both fruit orchard systems were all protable even with carbon prices of close to
zero. These options were thus relatively cost-effective from a
sequestration perspective. At higher rates, of around 30%, dispersed interplanting (faidherbia) was the cheapest while woodlot
was the most expensive at around US$ 80 per tonne C.
One major drawback of using NPV to assess incomes and costeffectiveness is that, from an economic perspective, it assumes
all markets for inputs and outputs function perfectly. In reality,
markets are likely to be constrained or missing altogether, which
may have been the case with the labour market in the project area.
There are two implications of this. First, the price data used to estimate NPV may not reect the actual prices used in land-use decision making. Instead, farmers and landowners decisions may be
guided by internal, shadow prices, which are not directly observable. To understand this behaviour requires knowledge of market
and institutional constraints, whether in labour or land, or other
inputs to agro-forestry. In addition to the possibility of labour market constraints in the project area, there is also some evidence presented by Jindal (2010) of tenure insecurity and credit constraints
among households. Second, market prices may not reect social
values and hence, NPVs may not correctly evaluate the social desir-

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

47

Table 2
The impact of the SLCP on household incomes. Source: Groom (2012).
Income
sources
Total
Total SLCP
Crop
Crop + SLCP

**


Impact (ATT) of SLCP on per capita net


incomes
214.78** (84.07)
137.89 (94.46)
186.71** (40.82)
154.79** (39.55)

Income
sources

Impact (ATT) of SLCP on per capita net


incomes

Off-farm
Livestock
Forest

336.48** (70.67)
10.65 (37.42)
16.84 (21.26)

Signicance at the 10% level.


Signicance at the 5% level.
Signicance at the 1% level.

ability of PES schemes. NPV measures should be treated with caution where a lack of data limits any attempt to correct for the use of
market prices.
3.2. Sloping Lands Conversion Programme, China
In 1998, severe oods wreaked havoc in the Yangtze River basin. In the previous year, severe droughts occurred in the Yellow
River basin. In each case the social cost of these environmental
disasters was enormous, including loss of life, lost agricultural output, and damage to sheries.13 Both disasters were at least partly
caused by deforestation in the upper reaches of the respective river
basins. In response, the Chinese government implemented the Sloping Lands Conversion Programme (SLCP). Beginning in 1999, it had
two main objectives. First, and primarily, to restore river basin/watershed-related ecosystem services by afforesting or reforesting currently cultivated highly-sloped land in the upper reaches of the
Yellow and Yangtze river basins. Second, the SLCP aimed to alleviate
rural poverty.
The environmental aims of the SLCP could only be achieved by
ensuring that extensive reforestation occurred. Initially, the proposed scope of the SLCP was to reforest 15 million hectares of
sloped land (Xu and Cao, 2002). By 2003, approximately 15 million
farmers had been enrolled in over 27,000 villages spread out over
20 provinces (ibid). In the rst two years of the SLCP, almost 1.2
million hectares of cultivated land was converted to forestland or
pasture while an additional one million hectares of barren land
was afforested. By 2005 over nine million hectares of cropland
had been retired (Bennett, 2008). Despite various problems in
implementation, the SLCP has been considered relatively successful in increasing forest cover and associated environmental services (Xu and Cao, 2002).
For participants of the SLCP, poverty was to be reduced via relatively generous compensation packages to households in exchange for reforestation of their cultivated land.14 Compensation
came in the form of cash, in-kind grain and occasionally tree-seedlings and technical assistance (Xu et al., 2004). By 2005 the total cost
of the SLCP was RMB50 billion (US$7.5bn). The compensation
scheme was initially planned to be temporary, lasting between ve
and eight years for participants.
3.2.1. The impacts of the Sloping Lands Conversion Programme
In order to alleviate poverty, participation in the SLCP would, at
the minimum, have to target the poor as participants to the programme. These participants would then have to be lifted out of
poverty as a consequence of their participation, i.e. from the compensation and assistance received for reforestation activities. Early
research concerning the implementation and targeting of the SLCP
13
In the Yangtze River, costs in the order of RMB7.8bn billion had already been
incurred in order to mitigate problems associated with ooding (CCICED, 2002).
14
In Purchasing Parity Power (PPP) terms the compensation offered to farmers was
more generous than that offered to participants of the Conservation Reserve
Programme (CRP) in the United States (Xu et al., 2004).

suggest that neither of these two requirements have necessarily


been satised despite the relatively generous compensation offered (e.g. Uchida et al., 2007; Xu and Cao, 2002).
Using programme evaluation methods, Groom (2012) estimated
the impact of the SLCP on participants incomes (the treated) by
comparing them against a control group of non-participants (the
untreated).15 A sample of 284 households, 70% of whom participated in the SLCP, was surveyed in 2004 in Guizhou and Ningxia
provinces.16 Using these data the impact of the SLCP on the numerous sources of participants incomes was established. Table 2 shows
the average treatment on the treated (ATT) calculated using
matched difference in differences for each category of income
(Groom, 2012). ATT measures the average impact on incomes net
of input costs for participants.
The rst row of Table 2 shows that the impact of the SLCP on
total net income was positive when the SLCP cash and grain compensation payments are included. Per capita income increased by
RMB214, or 10%, per annum compared to non-participants. The
impact net of the SLCP compensation (TOTAL-SLCP) was not significantly different from zero, however, meaning that in the absence
of the payments the average participant would be no better off
than the average non-participant. Most striking is that off-farm labour incomes increased by RMB336 per capita per annum. This
represents a clear shift of labour from on- to off-farm activities
for participants in the SLCP, over and above the general trend in
that direction.
The observation that participants in the SLCP were on average
better off than their counterfactual non-participants is necessary
to achieve poverty alleviation, but not sufcient. In order to establish whether the SLCP achieved this goal it is necessary to establish
the impact at different levels of income. Groom (2012) addresses
this question by estimating the quantile treatment effect (see
Table 3).17
Table 3 shows that the impact of the SLCP on household
incomes was positive and signicant at the lower quantiles of
the income distribution, compared to their non-participating
counterparts. At the 25th percentile of the income distribution participation in the SLCP increased incomes by RMB331 per capita, a
more than 50% increase on the income levels at that percentile.
At the 50th percentile (median income) the impact is comparable:
RMB473 per capita per annum, a 40% increase in incomes. Both
15
Difference in differences measures the impact as the difference in the change in
income over time between participants and non-participants. The matching procedure used propensity score weighting (Abadie, 2005) to match participants and nonparticipants on observable characteristics to calculate the difference in differences.
16
Ningxia is in the Yellow River Basin in central-northern China. Agricultural areas
are arid and agriculture is largely terraced. There are few off-farm labour opportunities. Guizhou is a humid central-southern province where off-farm labour
opportunities include coal mining. Both rural areas under study were poor with
average per capita incomes in the region of RMB1000 per annum.
17
This employs quantile regression techniques and measures the impact of an
intervention upon households at specic quantiles of the income distribution. Groom
(2012) employs quantile difference in differences following Athey and Imbens (2006)
and Ho et al. (2004).

48

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

Table 3
Quantile treatment effects (QTE) of the SLCP. Source: Groom (2012).
Quantiles (s)

Income at quantile (s)

Quantile treatment effect


QTE (s)

25th
50th
75th

607.75
1115.69
2133.89

330.96 (131.19)
472.85 (145.19)
286.26 (334.61)

.05

Official poverty line (RMB640)


$1 per day poverty line (RMB900)

-.05

-.1
Reduction
in poverty

-.15
0

1000

2000

3000

4000

5000

6000

per capita net income


Fig. 3. The SLCP impact on poverty by annual income (RMB). Note: Kernel matched
difference in differences. Source: Groom (2012).

effects were signicant at the 5% level. Importantly, at the higher


percentiles of the income distribution the SLCP had an insignicant
effect.
These results show that the SLCP had the greatest impact on the
poorest households, although they do not indicate the effect on
poverty alleviation in the area. To establish this, a comparison
was made across the income distribution of the level of income before and after participation in the SLCP against some measure of
poverty, as shown in Fig. 3.
Fig. 3 shows the percentage change in the number of households at each level of per capita income as a consequence of participation in the SLCP. The fact that the line is at approximately 0 for
income levels above RMB2000 indicates that the proportion of
households at these levels did not change as a consequence of participation. Below incomes of RMB2000, the negative values taken
indicate that participation has reduced the numbers of households
at these income levels. That is, the SLCP appears to have alleviated
poverty. The largest reductions occurred at or around the ofcial
poverty line, at that time, of RMB640. This also occurred at the
US$1 a day per capita income poverty line used by the World Bank
(RMB900 in PPP terms). In both cases, Fig. 3 shows that there has
been an approximate 10% point reduction in the poverty head
count.18
Together with Table 2, these results suggest that the impact on
incomes and poverty alleviation was due to a mixture of the SLCP
compensation and the substitution of agricultural labour towards
more lucrative off-farm labour income sources. As noted in Section 2, sources of off-farm income included working in local Town
and Village Enterprises (TVEs) along with migration to urban areas.
However, in explaining how the SLCP achieved its poverty alleviation goals, there remains the question of why households were not

18
Fig. 2 also shows is that if the impact on poverty was estimated at the less
extreme US$2 per day (i.e. at RMB1800) the conclusion would be that the SLCP would
have had no impact on poverty since it appears to have had a negligible effect on the
number of people at or below this level of income.

inclined to shift labour off-farm to alleviate poverty even in the absence of participation in the SLCP.
First, labour markets in rural China, as in many developing
areas, are imperfect. Migration from one district or province to another is regulated by the Hukou system of household registration,
under which individuals who wish to change their place of residence must gain approval from government authorities in order
to access public services in their destination. Second, land tenure
is frequently insecure in many rural areas with land allocations
made by local government. This inhibits the free movement of labour off-farm since households fear losing their land if they migrate. Third, prior to 2004, agricultural taxes had to be paid in
grain. With incomplete labour markets, payment of taxes required
household labour to remain on farm, again inhibiting the free
movement of labour.
These constraints have been found to be crucial determinants of
the household off-farm labour decision in Chinas SLCP. Thus, they
determined the household response to the SLCP and help explain
its success in achieving its poverty alleviation goals. Constrained
and unconstrained households were found to have responded to
the SLCP intervention in different ways.
First, the design of the SLCP, particularly the nature of the compensation, enabled constrained households to relax constraints on
off-farm labour, who either moved labour off-farm for the rst
time or supplied additional labour to existing off-farm labour
activities. In particular, the provision of compensation in grain enabled taxes to be paid and subsistence requirements to be met
without the need for labour to remain on farm. Yet, the need for
households to supply labour for reforestation activities may have
inhibited the migration of labour outside of the village.
Second, the supply of labour from constrained households was
more sensitive to credit constraints and insecure land tenure than
the labour supply from unconstrained households. Using the same
dataset as Groom (2012), Mullan et al. (2011) found that insecure
land tenure, for both agricultural and forested land, inhibited the
decision to supply labour off-farm and attenuated the impact of
participation in the SLCP. Credit-constrained households, on the
other hand, who participated in the SLCP saw their incomes significantly rise, at least partly due to the relaxation of liquidity constraints (Uchida et al., 2009). These constraints may have
formerly inhibited the decision of households to shift labour offfarm, including those already participating in off-farm activities
(Groom et al., 2010).
In sum, while the SLCP may have had a positive long-term impact on the income levels of constrained households it is unlikely
to have had a permanent effect on those of unconstrained households since their off-farm labour allocations did not change. The
reduction in poverty occurred solely as a result of the temporary
compensation. The important impact in terms of labour supply
was only observed in Ningxia. Weak land tenure and the absence
of land rental markets is likely to further reduce the sustainability
of the SLCP despite the initial impact on poverty (see Grosjean and
Kontoleon, 2010). Indeed many of the surveyed households reported that they planned to return land to former uses when the
SLCP ends.

3.2.2. Autonomy and voluntariness


The results from Groom (2012) indicate that not only did the
poor participate in the SLCP but that they also saw signicant income gains from participation. However, there is evidence that unlike the Nhambita project in Mozambique the SLCP appeared to
restrict autonomy in terms of how households allocated their labour. While this is perhaps unsurprising, set as it is in a country
widely regarded as authoritarian, it nevertheless provides an interesting laboratory for investigating income changes with different

49

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

types and varying degrees of autonomy over various household


decisions , i.e. the relative freedom to make such decisions.
For example, Bennett et al. (2011) looked at the role of household autonomy, during the implementation of the programme, in
determining outcomes. It appears to have countervailing effects,
depending upon the activities over which households had discretion. If households were able to choose the trees and plants with
which to reforest, environmental outcomes were better. Autonomy
over which land to retire led to lower environmental performance.
This was in part due to adverse selection of the quality of retired
plots: households naturally selected the lowest quality land to
retire.
Autonomy over plot choice and planting regimes for participants is a subordinate component of autonomy, however. The primary question concerning autonomy in the SLCP is the
voluntariness of participation. While it was widely described as a
voluntary scheme, in fact the programme was implemented in heterogeneous fashion from one local government to the next. In some
places the programme was involuntary, in others participation was
either completely voluntary or quasi voluntary: the local government chose among self-selected participants. Did differences in
implementation have an inuence on the success of the programme and the impact on participants incomes?
Based on new analysis by the authors, Table 4 reports the estimated impact of the SLCP on household incomes for households for
whom participation was voluntary and compulsory, respectively.
The group Voluntary 1 contains households for whom participation was voluntary and those who self select to be chosen by local
government. Voluntary 2 looks at the much smaller group for
whom participation was entirely voluntary. For the Involuntary
group participation was compulsory and households had no autonomy in this regard.
The results indicate that the impact of the SLCP on household
outcomes depends on the degree of voluntariness.19 Comparing
Voluntary 1 with Involuntary, participation only had a positive impact on incomes in cases where participation was compulsory and
households were selected by the local government. This increase
in incomes appears not to have come from increased off-farm labour
supply. Looking at the smaller purely voluntary group (Voluntary 2),
the SLCP has had a signicant impact on both per capita income and
off-farm labour supply. While we must be wary of this particular result, coming as it does from such a small sample, taken together with
the impact on the voluntary group as a whole (Voluntary 1), this
could be an indication that in terms of relaxing constraints to the
off-farm labour market, voluntary implementation appears to be
more successful than involuntary.
Involuntary implementation signicantly increases incomes for
participants compared to non-participants, but fails to increase offfarm labour supply. The positive effect of involuntary participation
indicates that the local government may well have targeted the
poorest households who benetted from the compensation. Indeed
initial incomes of this group were lower.
These results reect the types of households that self-selected
on the one hand, or were selected by the local government on
the other. More investigation is required on the nature of the selection process and the types of households participating under each
regime. But at least one aspect is bio-geographical while others are
likely to have been economic or political. Guizhou province had
more readily available off-farm labour opportunities compared to
Ningxia. Involuntary participation was more prevalent in Guizhou,
where relaxation of constraints was less likely to have been an outcome of participation. It is also possible that local government

19
The difference in differences estimator is used following Abadie (2005). The
results are comparable in this sense to Table 2.

Table 4
Impact of SLCP on income and off-farm labour for voluntary and involuntary
participants. Source: authors.
Impact

Implementation
Voluntary 1
(n = 121)

Per capita income


(RMB)
Off farm labour
(hours per
household)

228.8 ( 1.37)
40.75 (2.07)

Voluntary 2
(n = 21)

Involuntary
(n = 143)

696.61 (3.04)

545.00 (3.22)

183.7 (4.54)

94.79 (1.33)

chose to make participation less voluntary where it had poor information about household incomes and/or land characteristics. In
such settings, a voluntary policy could lead to the unintended
enrolment of unsuitable land or people possibly leading to ineffective or inequitable policy outcomes. But if degree of voluntariness
is under the control of local governments then it could follow that
with access to good information, more voluntary participation
might lead to greater household benets and the enrolment of
more suitable land into the programme. For now, we leave this
for future research.
4. Discussion: implications for REDD+ policy
In this nal section, we discuss the REDD+ policy implications of
income impacts from the two interventions in Mozambique and
China. First, the Nhambita Community Carbon Project in Mozambique is an actual REDD+ scheme, which integrated a range of landuse systems incentivised by PES with an approach to create alternative livelihoods, i.e. new sources of off-farm income. Second,
Chinas SLCP is a huge national-level PES scheme focused on the
adoption of reforestation as a means of supplying watershed services. Yet it offers lessons for the design of national-level REDD+
PES frameworks. We begin with the implications for long-run sustainability, and follow with those for forest conservation, scaling
up, and pro-poor targeting.
4.1. Implications for long-run sustainability
The Nhambita project incorporated a wide range of carbon
sequestration activities including different agro-forestry land uses,
reforestation and forest conservation, in contrast to the SLCPs focus on reforestation. Reforestation typically has a high carbon
sequestration potential as demonstrated for Nhambita. It also
demonstrates a relatively low income potential as well as being
less cost-effective compared with the other systems (Palmer and
Silber, 2012). But since the NPV estimates of income potential
are based on market prices and zero transaction costs for project
participants these could be lower still while those for cost-effectiveness may be underestimated.
The Nhambita project developers assume that the land-use systems will continue for 100 years with livelihoods and incomes
dependent on continued production of cash crops and other commodities. There is, of course, no guarantee that farmers will continue the land uses in a sustainable manner with repercussions
for carbon sequestration. There is a 15% risk buffer in case of carbon reversal, although this may not be adequate to cover all potential risks to carbon sequestered over such a long time period. Both
Jindal (2010) and Palmer and Silber (2012) note the considerable
risks in providing, in the rst seven years of the project, the entire
value of payments for carbon expected to be sequestered over
100 years. The fact that carbon payments are withheld if farmers
breach their PES contracts also implies that the conditional nature

50

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

of the incentive to continue supplying carbon will also end in year


seven. After these payments are made, the economic viability of
the land uses is dependent on the successful production and sale
of other commodities, the yields and prices of which are all subject
to uncertainty.
While there are no long-run guarantees for the future of Nhambitas carbon sinks, there may be better prospects for peoples livelihoods with the creation of a range of off-farm employment
opportunities in addition to those on-farm. The provision of capital
inputs, training and off-farm labour in Nhambita may all have
helped to relax prevailing labour market constraints in the area.
As shown by Jindal (2010), households working off-farm as well
as participating in agro-forestry contracts were found to be significantly better-off than those participating in agro-forestry alone,
although incomes of the former may have been overestimated.
Non-farm activities such as the microenterprises are also expected to become self-sustaining over the long-term, i.e. free of
nancial assistance from bodies such as the EU. If the project is
successful in reaching this goal then there is a risk that in shifting
more of their labour off-farm, households, particularly smaller
ones, may eventually abandon the carbon sinks established under
the agro-forestry/reforestation systems. This may not be a problem
from a carbon perspective so long as households property rights to
land are respected by other members of the community and
outsiders, with the carbon sinks left in situ. In reality, tenure is
insecure in Nhambita, which may worsen with increased competition for land and other resources in the area due to a seven-fold,
migrant-driven rise in the local population between 1997 and 2008
(Jindal, 2008). See Barr and Sayer (this issue) for more on tenure
insecurity.
Agro-forestry systems requiring maintenance over the long-run
may induce households to rent in labour, for example, if some
household members earn higher returns on their labour off-farm.
This, of course, presumes the existence of well-functioning labour
markets. Although these do not exist in either of the case study
sites, the policy interventions may have helped relax labour market
constraints in both. Constrained households were certainly shown
to be more responsive to the SLCP in terms of off-farm labour supply (Groom, 2012). In other situations where tenure is reasonably
secure, households could alternatively rent or even sell the land
and carbon rights outright. Either way, properly functioning labour and land markets may enable a freer allocation of labour and
land. These, in turn, could help secure carbon sinks while creating
opportunities for income enhancement.
In contrast to Nhambita, the case of Chinas SLCP more precisely highlights the challenges in evaluating the poverty impacts
of PES interventions in settings where labour markets are constrained and tenure is insecure. Work by Groom (2012) shows that
the programme not only raised incomes but also the incomes of
the very poor thus alleviating poverty. This was due due to a mixture of the SLCP compensation and the substitution of agricultural
labour towards more lucrative off-farm labour income sources.
Constraints such as those on off-farm labour and land determined the household response to the SLCP and its relative success
in achieving its poverty alleviation goals. In particular, for unconstrained households the SLCP is unlikely to have had a permanent
effect on their income levels because their labour allocations did
not change. This has implications for environmental sustainability
because participants must be induced to reorganise their activities
in some way, e.g. migration or off-farm labour. If not then the likelihood is that reforested land will be reconverted to former uses
once the PES cease at the end of the programme. At least compared
to agro-forestry, reforestation may require relatively little maintenance over the long-run. In order to maintain their incomes households could revert to agriculture on forest land, and any
environmental gains through reforestation might be lost.

4.2. Implications for forest conservation and biodiversity


For reforestation programmes such as Chinas SLCP, there may
be little to prevent households shifting their labour back on-farm
and converting planted forest back to agriculture in the long-term.
Thus, households may need further incentives to conserve forest in
the absence of off-farm labour opportunities. In that case, incentives would need to move away from those that create carbon sinks
to those that conserve sinks, i.e. moving from REDD+ to REDD. Yet,
given that reforestation activities in the SLCP focused on the planting of relatively few tree species, it is not clear whether it will bring
about much in the way of biodiversity benets (see Jane Trac et al.,
2007; Weyerhaeuser et al., 2005).
Mixed-use agro-forestry systems using native species such as
those implemented in the Nhambita project may have greater potential to contribute to biodiversity than reforestation efforts concentrated on fewer species (Jose, 2009). However, movements of
labour off-farm and the gradual abandonment of plots may lead
to changes in ecological succession, patch size, and edge effects
and potentially, localised declines in biodiversity even with increases in forest cover (see Robson and Berkes, 2011). Hence, the
Nhambita projects drive to create alternative livelihoods and shift
some household labour off-farm could, if successful, come at the
cost of biodiversity. In the absence of baseline data on biodiversity,
however, this is a proposition that cannot be tested. Future REDD+
programmes could collect these data in order to help evaluate and
target biodiversity (see Gardner et al., in press).
The Nhambita project also has a pure REDD component, i.e.
aimed at preventing further deforestation in areas of natural, biodiverse-rich miombo woodland around the Gorongosa National
Park. Yet, this woodland could be subject to further pressure from
rising demand for agricultural land in the area (due to in-migration) and the fall in demand for non-project, agricultural wage
labour (due to the net labour effect of replacing crops with agroforestry systems). Jindal (2010) notes that a loss of seasonal
agricultural work may have been partially offset by the increased
labour market opportunities arising from adoption of the agroforestry systems. Reduced labour demand in the area may have
made these farm labourers worse off. Given that the project is voluntary, with a range of possible agro-forestry and off-farm incomeearning opportunities, it is also possible that non-participants
chose not to enrol due to being better off by staying out. Data
are again not available to test this proposition.
4.3. Implications for scaling up
In general, the larger the scale and the broader the scope of
REDD+, the lower the risk that activities displaced by REDD+ will
lead to carbon leakage (Wertz-Kanounnikoff and Angelsen,
2009). Projects such as Nhambita can be expensive to implement
and manage, which may restrict the possibilities for scaling up. Indeed, the transaction costs of implementing and managing this
project have been estimated by Jindal (2010) and Palmer and Silber
(2012) to be in the range of 5066% of gross carbon revenues from
the sale of VERs. These were initially covered by project and donor
funds before being subtracted from carbon revenues. Despite
reducing the values of the payments made to households, they
remain higher than the opportunity cost of the land in the area
(Jindal, 2010).
The Nhambita project can be described as voluntary with high
participation rates. Scaling up would require incentives sufcient
to ensure high participation and hence, minimise carbon leakage.
Yet scaling up a PES project to a multitude of project-scale activities at the scale of Chinas SLCP runs the risk that not enough people volunteer to reach environmental goals, whether for
compensation-related (e.g. monetary) reasons or not. Therein lies

B. Groom, C. Palmer / Biological Conservation 154 (2012) 4252

the dilemma of how to scale up REDD+ activities sufcient to make


a meaningful and cost-effective contribution to climate policy
goals while providing enough in the way of incentives and benets
to the poor without the need for more coercive participation.
The relative degree of autonomy households have in participating and undertaking their roles in any PES scheme, including those
being proposed for REDD+, is an important determinant of the consequences of participation. As we have shown for the SLCP, the impacts on income and labour allocation differ in this dimension too.
This indicates that voluntary participation will be important in
some cases, where positive selection is likely, while involuntary
implementation may be a means of dealing with adverse selection
with respect to the targeting of policy recipients and/or environmental services. We note that the inability of the SLCP to affect labour allocations via involuntary participation may render the
programme unsustainable in terms of its effect on both poverty
and environment.
A lack of autonomy in household decisions over land use due to
government intervention may not only lead to income losses if
compensation is insufcient but may also result in an unwelcome
and unwanted shift in livelihoods. The rural poor have long been
most vulnerable to the appropriation of land and property rights
in developing areas, whether through policy intervention or not.
Indeed Phelps et al. (2010) voiced concern that REDD+ might reverse decentralization trends in natural resource management by
concentrating the policy and forest carbon rights with national
governments (see also Sachedina, this issue). At the core of these
concerns is peoples freedom of choice in terms of volunteering
their land and livelihoods into a REDD+ scheme. Concentrating forest carbon rights with governments may further reduce autonomy
over land-use decision making, and could provide further incentives for unsustainable behaviour where tenure is already insecure.
Finally, scaling up also requires some degree of coordination
among project-scale activities. Yet, scaling up to the national level
as in Chinas SLCP needs governments to be at the heart of managing, regulating and perhaps funding REDD+. But even if it were
desirable to have more (benecent) government control in order
to achieve effective, pro-poor REDD+ policy, such a level of control
is unlikely to be achievable in many of the more poorly-governed
REDD+ candidate countries.
4.4. Implications for pro-poor targeting
The SLCP targeted vulnerable areas of the Yellow and Yangtze
river basins for restoration activities, which restricted the poverty
alleviation impact of the SLCP. Targeting REDD+ towards carbonrich or potentially carbon-rich areas might, however, be less discriminating than targeting watershed catchment areas, which in
turn may make it easier to target the poor as well (see Pagiola
et al., 2005).
Even where environmental objectives are prioritised, if interventions can be designed so as to relax the constraints which bind
household decisions they may be better able to alleviate poverty.
Indeed, Groom et al. (2010) argue that the SLCP could have been
more successful in reducing poverty if it had, in fact, been properly
targeted and designed. Knowledge of the binding constraints faced
by potential participants, including those related to credit and land
tenure, could have guided such a targeting process. Once these
have been identied and evaluated, this information could be used
to inform pro-poor REDD+ policy. Policymakers could rst develop
generic, social and economic proles of the poor at the household
level. For national-level and other government PES schemes such
data could be collected at relatively low cost through pre-existing
data collection agencies. Programme managers could then assess
the potential impacts of different types of intervention, whether
cash payments, in-kind payments, improvements in tenurial

51

arrangements, or off-farm labour opportunities. Such impacts


could relate not only to raising incomes but also to ensuring sustainability of environmental outcomes and scheme cost-effectiveness. Thus, potential trade-offs under different policy scenarios
could be identied, which would then leave the policymaker to decide on the appropriate design of policy based on the stated aims of
a given REDD+ scheme.

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