We’re trashing the world not because it’s fun, but because it pays to do so. People respond to financial incentives. So, how do you provide an incentive to stop trashing the world? One idea is to use cold, hard cash. If people earn more by not trashing, the thinking goes, the incentive flips: it suddenly pays to conserve. Based on this idea, a trial program in Uganda paid landowners to preserve the forest on their land and tracked the results.

It turned out not to be so simple—people don’t always neatly do what they’re supposed to. What if these landowners were already concerned about deforestation and were already preserving their land? You’ve just forked out quite a bit to pay for something that was already going to happen. Or what if they just cut down trees elsewhere instead? Figuring out whether the benefits of the program are worth the cost requires collecting a lot of data.

A paper in Science this week reports on the results, which are encouraging: deforestation slowed to about half the previous rate, and it looks as though people didn’t just shift their forest clearing elsewhere. The program benefits seem to have outweighed the costs, whichever way you slice it. In other words, money provides a great incentive to preserve habitats, which is great news for climate change efforts.

“Payments for Ecosystem Services”

This kind of scheme is already widely in use—both in environmental efforts and in programs that incentivize families to send their children to school or participate in health programs. But efforts like this often become widespread before it’s clear whether or not they actually work—a bit like a popular diet that hasn’t been rigorously tested.

The danger is that all of these schemes rely on assumptions about human nature that don’t always check out in the real world. Programs that haven’t been tested run the risk of throwing resources away on something that doesn't work or even causes active harm.

Uganda is heavily forested, but it is undergoing rapid deforestation. Most of this deforestation is on private land, which accounts for about 70 percent of the forests in Uganda. Landowners sell trees for timber or cut them down to use the land. The forests serve as a kind of savings account—when a family hits a big expense, trees can provide a quick cash injection.

Cash transfer schemes have been tried before, but this program did something new: it was set up like a clinical trial, taking 121 villages in western Uganda and randomly assigning them to “control” or “treatment” groups. This helped the researchers to be sure that the villages in the treatment group didn’t have systematic differences from control villages.

In the treatment villages, landowners with forested ares could enroll to conserve their land for two years. Spot checks were carried out for signs of deforestation, but if the landowners stuck to the agreement, they received “Payments for Ecosystem Services” (PES). On average, landowners could earn US$56 per year. That’s about 16 percent of median annual household income in the region, equivalent to a US citizen being offered around $8,300.

A cheap way to save trees

Using satellite imagery, the researchers calculated the impact on forested areas. They found that in the control villages, 9.1 percent of tree cover was lost over the trial period of two years. By comparison, in treatment villages, tree loss was less than half that rate, at 4.2 percent. It’s possible that landowners were cutting down trees elsewhere—on another person’s land, for instance. But examining tree cover within the whole village means that this kind of leakage was included in the results.

There are other, more complex kinds of possible leakage. It’s possible that the timber market just adapted to sourcing timber elsewhere. A study this small may not have had effects large enough to trace in the overall market, but that might be worth tracking if a program rolls out nation-wide. This study also didn’t explore whether people were adapting to different fuel sources and what impacts this might have—it stuck to answering just the question about whether paying people made them cut down fewer trees.

The reduced deforestation also has a value, based on economic models of the social cost of carbon emissions. Using these models and testing a variety of different assumptions, the researchers conclude that the program benefits outweighed the costs. Under different assumptions about the future impacts of emissions, estimates of the program's value ranged from just about breaking even to a benefit of roughly fifteen times the cost. Compared to many other emissions programs, this is insanely cheap: “hybrid and electric car subsidies,” the authors write, “cost 4 to 24 times the CO 2 benefits they generate.”

A randomized controlled trial is a great way to get a solid lock on whether programs like this work, and it’s exciting to have such robust research looking into it. But it’s not the final answer: the results won’t necessarily generalize to every similar program. For instance, people might run out of patience eventually, so the benefits could tail off in permanent programs.

“Curbing deforestation in low-income countries, where most deforestation occurs today, is viewed as one of the most cost-effective ways to reduce global CO 2 emissions,” the authors write. “Thus, having rich countries finance conservation projects in poor countries is a promising way to address climate change.”

Financially, it seems that this might be true, but it may have unforeseen consequences for the lives of the people in those countries. For instance, it seemed as though this project stopped landowners from allowing poorer people to take firewood from their land. “A do-no-harm version of PES might want to include small cash transfers to poor, non-forest-owning individuals in the community,” the researchers suggest. Research looking at the wider economic changes brought about by programs like these will be an important part of the puzzle.

Science, 2016. DOI: 10.1126/science.aan0568 (About DOIs).