Estimations of REDD plus opportunity costs: Aligning methods with objectives

Since the early 2000 ' s when discussions started around the concept of REDD+ , numerous studies estimated the opportunity costs often implicitly viewed as proxies for the total costs of avoided deforestation. We reviewed their methods and the stated objectives to assess their alignment, suitability and robustness. We found a lack of correspondence between methods and objectives, which include setting compensation levels, identifying costefficient activities, or assessing financial viability with respect to carbon markets. While the search for perfect accuracy is a fallacy, some major mistakes must be avoided, e.g. equating the costs of avoided deforestation to opportunity costs or including an inappropriate group of economic agents in the calculations. Best practises must be followed to ensure that estimations properly inform intervention design, decisions and policies; they refer to methods applied and their suitability for related decisions. They include: the need to first define objectives and then adapt methods because estimations can be done variously with contrasted results; to cautiously determine the scope - which stakeholders and stages of value chain are considered - while prioritising the broad picture and avoiding getting lost in estimation details; to discuss sensitivity of results and recognise uncertainties; and to consider the implications of scale in the study design. Given the urgency to preserve natural forest and mitigate climate change in the most cost-effective way, we believe that our analysis and its recommendations are a step in this direction with expected increased emissions reductions due to improved interventions.