Analysis of Transaction Costs for REDD+ Trial Payment Scheme in Kilosa District, Tanzania
Journal Title: Journal of Environmental and Social Sciences - Year 2016, Vol 3, Issue 1
Abstract
This paper analyzes transaction costs for REDD+ trial payment scheme, based on the survey of 120 households belonging to four villages under REDD+ trial payment in Kilosa District. The analysis revealed that, estimated total transaction costs were TZS 2 704 ha-1 yr-1 equivalent to USD 1.7 ha-1 yr-1. The CBA results show that, the magnitude of NPV decreases by 90% with increase in discount rate from 15% to 31 %. The IRR is 33.7 % higher than the World Bank rate of 15% and the BOT rate of 20.6 % implying that the project is efficient. Local communities perceived REDD+ trial payments as important approach towards improving their forests and were satisfied with payments method used. The study concludes that most of transaction costs (99.7%) were carried by TFCG-MJUMITA project for implementing REDD+ project while villagers or communities implementing the project carried a tiny fraction of it. The REDD+ project worth to undertake since it is economically efficient and well perceive by the communities in terms of promoting villages’ forest conservation and income gain. It is recommended that Government intervention to pay for transaction costs could ensure sustainability of village forests under REDD+ particularly after donor support for such projects is ended. Villagers’ capacity to cover for transaction costs to implement REDD+ in their villages’ forests is lacking.
Authors and Affiliations
Beatus John Temu
Keywords
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