The Economic Benefits of Public Investments in Tropical Forest Conservation

April 2010

We examine here how the U.S. economy and U.S. households would be affected if the auction revenues set aside for tropical forests in Waxman-Markey were to be cut in half or completely eliminated. Because public funding for tropical forests would finance programs to prepare nations to participate in U.S. carbon markets, a decrease in public funding could result in fewer cost-saving international “offsets”. The paper examines optimistic, medium, and pessimistic offset supply responses under different levels of public market readiness funding.