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The Costs of Error in Setting Reference Rates for Reduced Deforestation

The Costs of Error in Setting Reference Rates for Reduced Deforestation ABSTRACT: Setting reference rates for policy to reduce emissions from deforestation and forest degradation is challenging. This challenge is reflected in the number of proposals for reference rate design. In this paper I show how these proposals have basic structural weaknesses that increase the likelihood of reference rates being set with error. This leads to higher costs of reduced-deforestation policy. I propose that reference rates be designed to minimize the cost of forecast error. These ideas are illustrated through forecasting agricultural land expansion in deforesting countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

The Costs of Error in Setting Reference Rates for Reduced Deforestation

Land Economics , Volume 91 (4) – Oct 16, 2015

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Publisher
University of Wisconsin Press
Copyright
Copyright by the Board of Regents of the University of Wisconsin System.
ISSN
1543-8325
Publisher site
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Abstract

ABSTRACT: Setting reference rates for policy to reduce emissions from deforestation and forest degradation is challenging. This challenge is reflected in the number of proposals for reference rate design. In this paper I show how these proposals have basic structural weaknesses that increase the likelihood of reference rates being set with error. This leads to higher costs of reduced-deforestation policy. I propose that reference rates be designed to minimize the cost of forecast error. These ideas are illustrated through forecasting agricultural land expansion in deforesting countries.

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Oct 16, 2015

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