Land burned to clear trees. Once it has been cleared it can be used for planting crops. Image credit: Meg KearnsResearchers from Northwestern University determined that paying people to keep trees on their land intact contributed to reductions in carbon emissions.

Currently, deforestation (the removal of trees) lends to a significant amount of human-induced carbon emissions.

The study, called Payment for Ecosystems (PES), involved financially compensating land owners in 60 western Ugandan villages for keeping the trees on their land intact. As a second part of the study, researchers observed landowners in another 61 villages, also in western Uganda, who did not participate in the PES program.

"We found that the program had very large impacts on forest cover," said Seema Jayachandran, associate professor of economics in the Weinberg College of Arts and Sciences at Northwestern and faculty fellow with Northwestern's Institute for Policy Research. "In the villages without the program, 9 percent of the tree cover that was in place at the start of the study was gone by the end of it, two years later. In the villages with the PES program, there was 4 to 5 percent tree loss. In other words, there was still deforestation, but much less of it.

"It wasn't the case that only forest owners who were planning to conserve anyway enrolled," Jayachandran said. "The payments changed people's behavior and prompted them to conserve. And we didn't find any evidence that they simply shifted their tree-cutting elsewhere. This truly was a net increase in forest cover in the study region."

Jayachandran also noted the cost-effectiveness of the PES program.

"A major contribution of the study was to compare the benefit of reduced deforestation to the cost of the program. What's that extra forest worth to society? We do that by applying what's called the 'social cost of carbon,'" Jayachandran said.

"This is an estimate that others have come up with for the economic damage to the world from each ton of CO2 that is emitted. We found that the benefit of the delayed CO2 emissions was over twice as large as the program costs. For many other environmental policies, the value of the averted CO2 is in fact smaller than the program costs."

Researchers believe that the program, which is detailed in an article published in the journal Science, is "a cost-effective way to avert deforestation in developing countries—and hence a powerful tool to mitigate climate change."