Money growing on trees: A classroom game about payments for ecosystem services and tropical deforestation

Abstract

Payments for ecosystem services (PES) programs use an incentive-based approach to pursue environmental goals. While they are common policy tools, key concepts determining their efficacy are nuanced and hard to grasp. This article presents a new interactive game that explores the functioning and implications of PES programs. Participants play the role of rural households in a developing country, deciding individually or as groups whether to enter into contracts to refrain from reducing local forests in exchange for payment from a forest-based PES initiative. The game explores topics that include PES programs, climate change, tropical deforestation, cost-effectiveness, additionality, illegal harvest and enforcement, and community resource management. Customizable materials, a detailed reading list, and discussion prompts are provided.

Keywords:

• Classroom game
• community resource management
• incentive-based regulation
• payments for ecosystem services
• tropical deforestation

JEL CODES:

• A22
• Q23
• Q54
• Q56
• Q57
• Q58

Acknowledgments

The authors are grateful for comments from Jo Albers and Hongxing Liu. Feedback on the game is very welcome!

Notes

1 Because these are the topics that this game is designed to focus on, we deliberately abstract away from the common pool resource feature of forests and the basic idea that public goods are underprovided. Games that explore common pool resource issues include Hazlett (1997) and Zetland (2017), and games that study public good provision include Holt and Laury (1997) and Pickhardt (2005).

2 Supplementary materials and online appendices are available at https://econ.williams.edu/profile/saj2/.

3 Deforestation and forest degradation can be defined and measured in many ways and estimates of their impacts on climate change vary widely. The measure we present here comes from IPCC (2014), which estimates that forest degradation and deforestation directly cause 11 percent of greenhouse gas emissions. The broader category of AFLU (agriculture, forestry, and land use) is responsible for 24 percent of greenhouse gas emissions.

4 The forest harvest in our game is forest degradation, which is defined as “the long-term reduction in carbon stocks such that the forest cover, height, and area are not reduced sufficiently to reclassify the land as non-forest” (IPCC 2014, 13). This is distinct from deforestation, which damages forest land enough so it does become reclassified (IPCC 2014).

5 For an overview of the broader institutional and implementation aspects of REDD+, please see Angelsen et al. (2018).

6 It need not be subsistence farming; while the story in this game is of small-scale deforestation by communities living near a forest and engaging in subsistence farming and harvesting, the game materials can be edited to represent a different setting, such as large-scale clearing for commercial agriculture.

7 Participants should consider this a net benefit from contract adoption that comprises both the money from the payments for ecosystem services program and any additional value (e.g., labor earnings) from the time that has been freed up that would have otherwise been spent harvesting from the forest.

8 The physical act of moving participants around the room to find community members takes time and space as compared to the case in which people who are already spatially adjacent form groups. On the other hand, one could see physical movement as a feature, rather than a bug, as getting the blood going can heighten energy mid-session.

9 Again, supplementary files can be accessed at https://econ.williams.edu/profile/saj2/.

10 If participants are directed to Hardin (1968), it is worthwhile to also flag its problematic elements; see, for example, Mildenberger (2019). Ostrom (2010) is a nice counterpoint to Hardin’s points as well.

11 In these plays of the game, the payments for ecosystem services program was referred to as “REDD+” and illegal harvest was referred to as “fraud.”

12 The game has also been used at capacity building workshops for mid-career government officials, NGO officials, and environmental professionals in developing countries. Feedback from these sessions is available on request.

13 To hide illegal harvest except when revealed by audit, the identity of decision-makers must be hidden or the spreadsheet must be video muted at strategic times.

14 Uncertainty (a mean-preserving spread) can be incorporated into the return to farming by adding a “Realized Farming Income” column that differs from the “Farming Income” column by a random offset or multiplier. The shock can be created with a manual die-roll or the rand() function in Excel.