Should we pay people not to cut down trees?

A two-year study in Uganda helps ease some of the biggest concerns about programs that pay landowners to leave natural resources untouched.

To safeguard forests, wetlands, estuaries, and other natural resources, policymakers have long employed a strategy that is at once straightforward and counterintuitive: pay landowners to leave their land alone.

But researchers have worried that such policies, known as payment for ecosystem services (PES), have two big pitfalls. First, how do we know that landowners wouldn’t have preserved their land anyway? And second, how do we know that they won’t just shift their land use to places not covered by the payments?

A case study of such payments to landowners in Uganda, published Thursday in the journal Science, may help ease these concerns. A two-year experiment found that tree cover declined by about half as much in villages where landowners were offered payments compared to the villages where they weren’t, and it found no evidence that landowners who were paid to preserve their land shifted their deforestation to nearby land. The study raises hopes for similar efforts around the globe – particularly in the developing world, where strategies to address climate change can harm the livelihoods of already marginalized people. 

“I think our results should make us more optimistic that this approach will work elsewhere – and thus more willing to pursue it elsewhere and find out,” says Seema Jayachandran, an economics professor at Northwestern University in Evanston, Ill., and the study’s lead author.

Protecting forests plays a critical role in curbing climate change. As the paper’s authors note, between 2006 and 2015, land-use changes, mostly in the form of deforestation, were behind 9 percent of manmade carbon emissions worldwide, making it the second largest driver of emissions after fossil fuel combustion. 

How effective?

Uganda’s forests, in particular, are rich in biodiversity, home to half of Africa’s bird species, as well as the chimpanzee, humankind’s closest known living relative. 

Professor Jayachandran’s case study involved 121 villages in western Uganda, 60 of which were randomly selected for the PES program for two years. Landowners who opted into the program received 70,000 Ugandan shillings ($28 in 2012 dollars) each year for each hectare of land they left untouched.

Using satellite data and on-the-ground spot checks, Jayachandran and her colleagues found that tree cover declined by 4.2 percent during the study period in villages that received the payments, compared to 9.1 percent in the control villages. What’s more, they checked for possible evidence that the landowners were shifting their deforestation to nearby land, and found none.

“I was surprised by how well the program worked. I expected the PES program to slow down deforestation, but not by this much,” says Jayachandran.

Jayachandran and her colleagues conducted a cost-benefit analysis, comparing the payments with the negative costs of carbon emissions, as calculated by the US Environmental Protection Agency. They found that the benefits were 2.4 times the program costs, costs that are outweighed even if the landowners tried to make up for lost time by cutting down more trees after the program ended. 

“I think this study is very well executed and provides important and rigorous evidence on a policy topic that has received quite a lot of attention,” says Kelsey Jack an economist at Tufts University in Medford, Mass., who specializes in environmental and developmental economics.

Are PES programs just?

Payments for environmental services is not a new idea. In the United States, the Department of Agriculture’s conservation reserve program, started in 1985, pays farmers to take croplands out of production. The agency’s FY 2018 budget sets aside $2.1 billion for this program. PES programs have also been implemented to combat deforestation in Costa Rica, Brazil, and Mexico.

But are PES programs just? After all, they take revenue generated by labor and redistribute it to idle landowners.

Jayachandran notes that the typical forest owner in Uganda owns only a couple hectares, works his or her own land, and lives on $2 to $5 per day. They typically use the money from selling timber to pay for school fees or unexpected expenses such as hospital bills. But she acknowledged that the payments, by themselves, might increase inequality slightly because landowners are relatively well off within their communities.

“My recommendation to policy makers pursuing PES programs is to pair them with cash transfers to the very poor, those who don’t own forest,” she says. 

“Another alternative we might compare PES to is that we first redistribute the land and make sure everyone in the village owns an equal amount before offering incentives for forest conservation,” Jayachandran adds. “Or we roll back the system of private property ownership and make the forest communally owned.” 

Professor Jack says that when considering the environmental justice of PES, we should look at the bigger picture.

“Climate change is also pretty unjust,” she says, “so if PES turns out to be a cheap way to help avoid deforestation, then it should certainly be on the table, along with policies that help poor households become more resilient, and – ideally – richer.”