The Cost of Protecting the Peruvian Amazon: Opportunity Cost of REDD+ in Madre de Dios, Peru and its Policy Implications

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Robert Mendelsohn
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In 2008, the Peruvian Ministry of the Environment announced the country’s goal to reduce its rate of deforestation to zero by 2021. Instrumental to this effort is the development of a national forest conservation program based on the United Nation’s REDD+ mechanism. Although potentially hugely beneficial, both economically and environmentally, the Peruvian REDD+ framework remains in its infancy and has still not been properly analyzed from an integrated perspective. This essay examines both the economic feasibility and policy implications of the implementation of REDD+ in the Peruvian Amazon. Analyzing a case study in the region of Madre de Dios, I found that the large majority of the region’s area could be cheaply set aside under REDD+. However, factors such as lack of enforcement of protected areas, and a lack of proper definition of relevant carbon rights in the Peruvian legal framework make it extremely difficult to properly estimate and assign the costs, benefits and responsibilities of such a scheme.