C (3:55)

That's certainly true. And so forests in developing countries provide cleaner water that goes to support agriculture. They keep the slopes and the soil in place so that they're not eroding to back up hydropower dams, so that they're not coming down in landslides on top of villages during heavy storms. And forests do provide livelihoods and income. A lot of this is off the books. It's maybe a. A community that lives by the forest will go in to gather food, to gather medicine. There was a recent report that around 20% of all income in communities in remote rural areas near forests is coming from forests. And so in those areas, it's on par with what's coming from growing crops.

B (4:52)

So when you cut down a forest and plant palm oil or soy instead on the books, productivity has gone way up, but. But the losses are not necessarily being captured. Is that the case?

C (5:05)

Now I'm going to get into the macroeconomics here, the gdp. I'm learning recently that gross domestic product is like palm oil. It's in absolutely everything and it captures a country's income, but it doesn't capture the losses. You wouldn't think to manage your household finances only by looking at how much salary you receive and not thinking about your expenses. If you're a business, you wouldn't think about your revenues without thinking about your costs. But on a macroeconomic level, that's exactly what countries do. If they're clearing a forest for palm oil, the palm oil contributes to their gdp, which they can hold up to the world and say, look, we've grown. But they don't capture the losses. They don't capture the losses of the services that the forests provide. And the income that the forests provide are often off the books.

B (6:03)

I want to shift a bit to the study itself. Khalifi, I understand that you did the really heavy lifting in terms of these studies, and the paper explains the criteria that were used. Ultimately, you winnowed IT down to 117 spatially explicit econometric studies that you then mashed together to get the findings, which. What does that mean? A spatially explicit econometric study? Can you unpack that for those of us who are not true wonks?

A (6:31)

So a spatially explicit econometric study means that the study itself has a Regression analysis where they input drivers of deforestation with respect to deforestation. And the spatial word within that context means that the deforestation itself was gathered through remote sensing or through means of satellite.

B (6:57)

So they're looking at plots of land that were forested at the beginning of the study or maybe were not forested. And then a period of time passes and they look at various factors that might have affected whether or not the plots in the study were deforested. Are the plots sort of all the same size or some studies using 10 square kilometers and others using 100 square kilometers. Do you have to adjust for the size of the plots?

A (7:23)

Right. So some studies actually use parcels of land, and other studies use a grid structure that they can overlay through a computer.

B (7:33)

So parcels might be ownership or it might be a national park or something fairly big.

A (7:38)

Right. It can go from farms to the resolution size of the pixels that are generated by a satellite. And that depends on the quality of the satellite too, sometimes.

B (7:51)

I was struck in working with you and Jonah on the brief, and I should advertise, we now have a brief for those who don't want to go through the whole paper. Meta study offers new insights on stopping deforestation. And one of the things that struck me was the really large share of the tropical forests in the world that were covered by the study. Do you remember? It's big.

A (8:17)

Sorry? The number of tropical forests, the total.

B (8:22)

Share of tropical forest that's covered here, I have it here covering two thirds of all tropical forests. So it's not like you're looking at a small sample of 10 or 15% of tropical forests and then extrapolating your findings to a much larger universe. You actually have the majority of the universe one way or another covered by these studies.

A (8:40)

Correct. And also through a long period of time, since most of these articles began being published in 1996. So it crosses a large global portion of the forest that we're primarily concerned with here at the CGD within our project, and then also for a few.

B (9:03)

Decades, throughout a few decades and 36 countries. So it's quite a. Quite a large study. I think for some of our listeners, it's useful to think of because we see these in the paper much more often of meta studies of medical intervention. So you'll have a bunch of studies about breast cancer and whether or not certain drugs are effective or not, and then somebody will do a meta study where they'll crunch all those together and they'll come out with a finding that says, for example, recently, you know, annual mammograms are probably not effective in detecting breast cancer or not effective in the end in preventing breast cancer deaths. So this is a similar kind of technique where you've taken a lot of studies and mashed them together.

A (9:40)

Correct. But it should be said that some of the variables that we should be concerned with are not usually taken into these studies. Things that you can't really measure, like corruptability, political stability, aren't really measured in a lot of these studies.

B (9:59)

So the studies tend to be looking. In fact, another interesting thing about the study is you had a really large number of things when the study authors are doing this, they don't coordinate with each other and say, let's measure these 15 variables. So they define the variables differently. And you had to take a really large number of variables and then say one would say it's land tenure and another might call it land rights or something. You had to then collapse those into similar indicators. Is that right?

A (10:24)

Right. Interestingly, they measure the same number of variables because. Because there are a few, there are a handful that are very quantifiable, like population numbers and how they change over time and distance to roads, things that are more spatially available. So a lot of these kind of sub variables, the variables that these individual authors used, like you said, who did not kind of collaborate with other authors, end up studying. Studying the same things just because of the availability of this information.

B (11:00)

Terrific. We're going to take a short break. When we come back, we're going to dive right in to what you found. This is the Global Prosperity Wonkcast from the center for Global Development. I'm speaking with Khalifi Feretti Gallen and Joan Bush about their new paper, what Drives Deforestation and what Stops? A Meta Analysis of Spatially Explicit Econometric Studies will be back in a bit. Welcome back to the Global Prosperity wonkcast. I'm Lawrence McDonald. My guests today are Khalifi Feretti Gallen and Jonah Bush. We're discussing their new study of what drives deforestation. In the first half of the show, we talked a little bit about why a place that is focused on development might care about deforestation. The approach of their study, which combines 117 other studies and some of the variables. I want to dive in now to what you found, Jonah. When I first looked at the study, I thought, big deal. You guys crunched all the numbers and you told me something you already know. Roads drive deforestation. So some of this was not very surprising.

C (12:21)

Well, thanks, Lawrence. So, yes, we looked at.

B (12:24)

Thanks for running down my study.

C (12:26)

Yeah, right. So we looked at about 40 different variables, different factors that cause or impede deforestation in different places. And roads was one of them. We looked at biophysical variables like is land on steeper slope, is it someplace that gets more rainfall? We looked at infrastructure.

B (12:46)

Again, not a big surprise there. Steep slopes are slower to get deforested. Wet places are slower to get deforested. Some of this confirmed our conventional wisdom, right?

C (12:57)

That's right. So what's new about our study is that we are, we're able to compare quantitatively across these 40 drivers. So yes, we may have known that roads cause deforestation and yes we may have known the parks impeded protected areas. But now we can actually compare and say something like for every one time that a park shows up, as with higher deforestation, there's six times where it shows up with lower deforestation.

B (13:28)

So if somebody is thinking about putting a park in place, they can use your evidence to say it really is going to help.

C (13:34)

Yeah, six to one on average across the whole. So as you were saying, some of the things we found confirmed what people have known for a long time in more of a qualitative review the literature sort of way, but not a quantitative way.

B (13:50)

What was the biggest single surprise for.

C (13:53)

You I was expecting, I think to see that community forest management lined up more with less deforestation. This is places where the rights to the forest have been devolved back to local people. There's a lot of hope that by doing so it could stop deforestation. Because if this were the case, you'd have a nice win win for local economic development and forest protection.

B (14:28)

And it did not.

C (14:30)

Well, what we found is that while it was, there were slightly more cases where community forest management was associated with less deforestation rather than more deforestation. It wasn't a statistically significant difference. So it fell in our category of drivers of potential factors that we really couldn't say consistently one way or the other accelerated or slowed deforestation.

B (15:02)

And this is an intervention, if you will, as I understand it, that probably has appeal both on the left and the right. The left would like the idea of local control. The right would say clarifying property rights is a good idea. So as you say it's win win. It's also politically appealing. I guess quite a lot of money and effort has gone into it. And your finding is eh, maybe not so much, huh?

C (15:23)

Yeah, it may be good for development. That's sort of a study for another day. We found similar findings with more secure land tenure. It's another intervention that's Promoted as being good for development and being good for forests. It's a big world out there, and certainly in some cases it's been good for development in forests. But we found just as many other places where there was more deforestation.

B (15:53)

Based on your analysis, is there an intervention that should receive more attention and effort than it currently does, Something that's probably under emphasized that we should make a bigger deal about?

C (16:06)

Well, so let me tell you which we found as the good policies or the good interventions for slowing deforestation. Keeping roads out of an area, making sure that road networks are planned in a way that connects people, gets them to market, but doesn't open up new frontier areas of remote forest. That's going to be good for forests. Siting protected areas and places that actually slow down the path of deforestation. That's going to be good.

B (16:41)

That was an interesting one to me because I, in my quick reading of it, a lot of the protected areas are in areas that are relatively remote anyway. It's nice that they're protected. But your studies suggest that since protected areas seem to work pretty well, put them in the areas that may be at the periphery, at the frontier of the deforestation would be even more impactful.

C (17:03)

That's right, if the goal is to slow deforestation. So it's worth keeping in mind that many protected areas were not initially put in place with the goal of slowing deforestation. They were put in place to preserve for posterity particularly beautiful places or particularly biologically important places. We think of that in this country. Our protected areas have gone to scenic mountain areas that are far from the path of development, that are not as economically viable. We haven't done as much protection of, you know, fertile lowlands in this country. And that's been the path in other countries as well. If we want to turn protected areas into one of the tools for slowing deforestation, they would have to go in a place that's threatened. Now, the thing, to me that's, you know, one of the conundrums about forest conservation is that you want to be doing it in a way that's beneficial to people that live nearby. That's not just blocking off an area and saying you can't use it anymore. And so I was very encouraged to find that something called payments for ecosystem services does seem to be effective at slowing forests. This is recognizing that people who live in and around forests have the best claim to using that land to support their families, to get a livelihood. And this is saying, we will, we being here, the governments of those countries, in countries like Costa Rica and Mexico have offered payments to land users who keep their forests standing. And these sorts of payments appear to be associated with, in fact, keeping the forest standing. They're one of the factors that we find that's consistently associated with less deforestation, far more often than more deforestation.

B (19:16)

I guess maybe I've missed the lead, as they would say in the news business that this payment for ecological services, or pes, as you call it in the paper, is the big finding, that that does work pretty well, because I think the jury's been out on that. It sounds a lot like community forest management, but I guess it's different in that you have the additional factor of saying that the community or the households associated with a particular forest area are going to receive payments specifically for preserving the forest, as opposed to managing the forest by harvesting it or doing whatever is going to be done. But the two, I imagine the two systems often kind of overlap.

C (19:54)

So there's money coming in from the outside for payment for environmental services. I think you're right that the jury is still out on pes. We have, I think, an evidence base of only four studies here. Now, all four of the studies were finding the same thing, and that's good, but that's compared to something like Rhodes, where we were looking at 40 or 50 studies all pointing in the same direction.

B (20:21)

Is that because the payment for ecological services is relatively new and hasn't been done in the other places? Or just that it's been done there but hasn't been studied?

C (20:28)

It's both. It's newer. We have roads all over the world, whereas you have payments for ecosystem services just trialed in a few countries. One of the values of this study is to point out where future research should be going. We find a lot of studies on infrastructure. We find relatively few on law enforcement, we find relatively few having to do with gender. We find relatively many in Latin America and Asia. We find relatively few in Africa or in Eastern Europe.

B (21:02)

At the end of the paper, in a very good short section on future research, you suggest that there might be scope for quasi experimental studies, perhaps maybe especially on pavement for ecological services. What would that look like?

C (21:19)

Listeners who tune in to center for Global Development will be, I think, familiar with the idea of random control trials, which are actually experimenting, trying one intervention in one place, withholding it in a similar place and seeing the difference. It's difficult generally to do that with these forest management because the interventions are at such large scale. It's not just providing bed nets for malaria to one household and not another. It's maybe running a road through a region or not. So it's big interventions, and over a.

B (22:00)

Period of time, over a long period of time, you can't do it for eight weeks and get your results.

C (22:04)

But there are natural experiments. There's not many, but they're out there. And so this is looking for cases where by chance or by something unrelated to the characteristics of the community or the forest, an intervention went in one place or not another.

B (22:25)

So one district might do this and then the other district doesn't. The districts are similar enough. You could compare them.

C (22:30)

There's an excellent example from Mexico. So it's difficult to disentangle whether the relationship between levels of poverty and income and levels of deforestation, because there's so many other factors that vary with both of those. Now, there's a wonderful study in Mexico where incomes were artificially raised in some communities and not in others, just because there was an allocation formula of which communities were eligible for rural support. The famous cash transfers, the cash transfers in Mexico. So some communities were barely eligible, some were barely ineligible. They were able to look at what happened to deforestation on either side of that line. Deforestation was not one of the criteria for receiving payments. And they found that more income coming into the community actually created more deforestation.

B (23:32)

So something similar might be done with payments for ecological services where there would be an accident that would generate a natural experiment and one could look then at the impacts.

C (23:41)

That's right, payments. You know, the ministries that operate these payment services often have small budgets and they can't pay every community that they like to. So they also have formulas to decide which are the first communities to receive payments.

B (23:59)

So if there are any listeners out there that are thinking about piloting a Payment for Ecological Services scheme and would like to work with Jonah and Khalifi to make it into a natural experiment, give us a shout out. I want to bridge quickly. We've got just about one more minute here from the Payment for ecological Services. Big headline. Based on the studies that you reviewed, it does seem to work to the broader international effort to compensate forest countries to incentivize tropical forest countries to protect their forest. The thing that goes under the acronym of Red Reduced Deforestation and Degradation, that also involves payments, but at a macro level, a payment from one country to another. Could those big payments then bridge somehow to payments for ecological services at a village or community level?

C (24:55)

They could potentially, but they could bridge to any one of these other interventions as well. So as formulated in the international agreements, reducing emissions from deforestation and degradation would have the rich countries paying the forest countries for the reductions in their deforestation. But it wouldn't prescribe how to do that. It's up to the forest countries to figure out what works best in their context to achieve reduced deforestation. Those countries could look at this study and they'd be able to say, all right, from three dozen other countries like ours around the world, we see that payment for ecosystem services works. We see that allowing indigenous peoples to keep control of the rights to their land keeps deforestation rates low. We see that law enforcement works. We see that protected areas work. They can turn to these methods. And whichever they choose, whichever combination works best in their country by reducing deforestation, they would be. They'd have a claim to money coming in from rich countries in support of the emission reductions generated.

B (26:22)

So all we need, really, it's a simple matter, is for the rich to go ahead and put a price on carbon or failing that, to begin by finding money in other ways to protect the forests because it's cheap at half the price. This is one of the cheapest reductions we can get in emissions, is to stop cutting the forests down.

C (26:41)

That's right. When the US federal government was debating climate legislation in 2009, there was several billion dollars, several billion tons of emission reductions that would be purchased from tropical forests because it's a cheap, easy and urgent way to address the climate problem. 10 to 15% of the emission reductions, but one that we know how to tackle now in part because of this study and the many hundreds of dozens of studies that it draws upon. And it's one that doesn't require new technology. You don't need to invent carbon and capture and storage. Trees have been capturing and storing carbon from the atmosphere for millions of years using photosynthesis. We just need to allow them to keep growing.

B (27:36)

And as a bonus, we get to preserve the homes of all the remarkable creatures that live in the forest. We haven't talked about that, but I think for many of our listeners, the biodiversity is an important piece of the argument as well.

C (27:47)

In the rich countries, biodiversity would be another one of these global public goods things that many people in the world benefit from. In the forest countries, often the more immediate concerns are the agriculture that depends on clean water from forests making, you know, having your home not be flooded out or lost in a landslide. With forests that can stabilize slopes, everybody wins.

B (28:15)

Jonah and Kalithi, thank you very much for joining me on the show.

A (28:17)

Thank you, Lawrence.

C (28:18)

Thank you, Lawrence.

B (28:19)

This has been the global prosperity wonkcast from the center for Global Development. My guests today are Khalifi, Feretti, Gallen and Jonah Bush. They are the authors of a new working paper about what drives deforestation and for the non wonks among us, a terrific brief that sums up the findings we've been discussing, the findings of their paper and the policy implications. You can find the Wonkast online on itunes and on Stitcher. Just search for wonkcast or CGD and sign up to hear a new interview every week. Until next time, I'm Lawrence MacDonald. Thanks for listening.