The following paper enrich discussion on REDD scheme and its relation with timber market in Europe. The authors explain the leakage implication, price increases, supply response outside project boundaries, carbon emissions and more.
It’s interesting since the REDD scheme still tested in several countries. Some countries have established preparation mechanism and institutions.
The authors review the literature to discern potential timber market implications for countries sourcing wood products from developing countries affected by REDD related conservation efforts. It shows varying degrees of market effects leakage—policy actions in one place creating incentives for third parties to increase timber harvesting elsewhere through the price mechanism—ranging from negligible to substantial.
The authors argue that REDD may have unintentional implications for forest sectors in countries not targeted by such policies. “The success of a policy effort like REDD would result in a significant reduction in deforestation and forest degradation and an ensuing reduction in the supply of natural forest timber production within participating countries,” say authors.
This could in turn result in price increases, inducing a supply response outside project boundaries with possible implications for forest management as well as global carbon emissions.
Assessing the overall effectiveness of REDD according to the authors, some of the following also need to be studied: empirical analysis of supply and demand, price elasticity and degree of substitutability.
Find complete paper:
Jonsson, Ragnar; Mbongo, Werner; Felton, Adam; Boman, Mattias. 2012. “Leakage Implications for European Timber Markets from Reducing Deforestation in Developing Countries.” Forests 3, no. 3: 736-744.