Interactions of Reduced Deforestation and the Carbon Market: The Role of Market Regulations and Future Commitments

by Niels Anger, Alistair Dixon and Erich Livengood

- Reducing emissions from deforestation and degradation (REDD) has been proposed as a potentially inexpensive and plentiful source of emission abatement to supplement other longterm climate policies. However, critics doubt that REDD credits are environmentally equivalent to domestic emission reductions, and suggest an excess supply may disrupt carbon markets. In this context, we investigate the economic implications of emissions market regulations and future emissions reduction commitments, as well as uncertainties in REDD credit supply.

Anger, N., A. Dixon and E. Livengood (2009). "Interactions of Reduced Deforestation and the Carbon Market: The Role of Market Regulations and Future Commitments." ZEW Discussion Paper No. 09-001, Mannheim, Jan 2009.