A “Task Force on Sustainability-Linked Sovereign Financing for Nature and Climate” will convene to establish a framework to ameliorate the debt, biodiversity, and climate crises by reforming debt-for-nature swaps, i.e., voluntary transactions in which creditors reduce or cancel debt in exchange for debtor-country commitments to fund specific environmental activities. We identify four reforms that should underpin the new framework: (i) Offer debt relief at a nationally consequential scale; (ii) defer to debtors on implementation to reduce transaction costs and raise debtors’ benefits; (iii) employ performance-linked instruments based on reliable metrics to ensure global gains; and (iv) integrate all of those metrics across biodiversity conservation, emissions reduction, and climate adaptation to allocate funds most efficiently.
Seth Morgan, Alexander Pfaff, Julien Wolfersberger
Annual Review of Resource Economists (2022) https://doi.org/10.1146/annurev-resource-111920-
022804
For over a century, starting with the work of Alfred Marshall (and also in resource economics), economic geography has emphasized the productivity of dense urban agglomerations. Yet little attention is paid to one key policy implication of economic geography’s core mechanisms: Environmental policies can aid economic development, per se—not hurting the economy to help the environment but advancing both objectives.We review mechanisms from economic geography that imply that environmental policies can deliver such win-wins: influences upon agglomeration of long-tanding natural conditions, like usable bays, which long were perceived as fixed yet now are being shifted by global environmental quality; agglomeration’s effects on other influential conditions, like urban environmental quality; and the effects of rural environmental quality on the flows to cities of people and environmental quality. Finally, we consider a geographic policy typology in asking why society leaves money on the table by failing to promote environmental policies despite the potential win-wins that we highlight.
Rachael Garrett, Alexander Pfaff, Kristin Komives, Jeff Milder, Ximena Rueda
Meridian Institute Report
We aim to offer guideposts for forming expectations about when SSIs are “effective” (defined below). We suggest some factors that affect SSIs’ effects on both narrow and broader goals. With improved understanding of how those factors affect behaviors and outcomes, actors developing and improving SSIs can better predict which efforts will improve sustainability and can better organize empirical SSI studies.
Lisa Mandle, Benjamin P. Bryant, Mary Ruckelshaus, Davide Geneletti, Joseph M. Kiesecker, Alexander Pfaff
Conservation Letters 2015 (online 9/28, doi 10.1111/conl.12201)
New infrastructure is needed globally to support economic development and improve human well-being. Investments that do not consider ecosystem services (ES) can eliminate these important societal benefits from nature, undermining the development benefits infrastructure is intended to provide. Such tradeoffs are acknowledged conceptually but in practice have rarely been considered in infrastructure planning. Taking road investments as one important case, here we examine where and what forms of ES information have the potential to meaningfully influence decisions by multilateral development banks (MDBs). Across the stages of a typical road development process, we identify where and how ES information could be integrated, likely barriers to the use of available ES information, and key opportunities to shift incentives and thereby practice. We believe inclusion of ES information is likely to provide the greatest development benefit in early stages of infrastructure decisions. Those strategic planning stages are typically guided by in-country processes, with MDBs playing a supporting role, making it critical to express the ES consequences of infrastructure development using metrics relevant to government decision makers. This approach requires additional evidence of the in-country benefits of cross-sector strategic planning and more tools to lower barriers to quantifying these benefits and facilitating ES inclusion.
Alexander Pfaff, Gregory S. Amacher, Erin O. Sills
Review of Environmental Economics and Policy, volume 7, issue 1, winter 2013, pp. 114–135 doi:10.1093/reep/res023
This article, which is part of a symposium on the economics of REDD, identifies three common settings for forest loss involving different types of decision-making agents that operate under different markets and institutions. That suggests using different theoretical frameworks for these three settings, which in turn generates different predictions concerning policies’ impacts. The first model, “producer profit maximization given market integration,” has been applied to many private decisions about the best locations for profitable land uses, such as agriculture and forest. Its predictions have been widely studied empirically, beginning no later than von Thunen (1826). The second model, “rural household optimization given incomplete markets and household heterogeneity,” has been applied to more isolated settings featuring high transactions costs that yield incomplete integration of households in input and output markets. Its policy impact predictions have been tested with surveys at household and village levels. In the third model, “public optimization given production and corruption responses by private firms,” a public agency determines public forest access by balancing public goods, public revenue needs, and private rents to award concessions. There is potential for corruption, and the decisions may be affected by decentralization. This model’s predictions can be tested using observed policies. We find that past policies rarely addressed the incentives driving forest loss effectively. This helps to explain the limited impact of past policies on deforestation and forest degradation. It also suggests directions for the design of future policies. In sum, the theory and the evidence suggest that REDD success requires an understanding of all the incentives that drive forest loss, so that domestic policy can be tailored to specific settings (i.e., relevant agents and institutions).
We examine theoretically the emergence of participatory comanagement agreements that share between state and user the management of resources and the benefits from use. Going beyond user-user interactions, our state-user model addresses a critical question—when will comanagement arise?— in order to consider the right baseline for evaluating comanagement’s forest and welfare impacts. We then compare our model’s hypotheses concerning de facto rights, negotiated agreements, and transfers (all endogenous) with community-level data including observed agreements in a protected Indonesian forest. These unique data could refute the model, despite being limited, but instead offer support.
