Poverty alleviation can be an effective conservation strategy
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Two of the great global challenges of the 21st century are to reduce poverty and slow tropical deforestation. Solutions to these challenges are often framed as conflicting with each other. We evaluated Indonesia’s anti-poverty Program Keluarga Harapan (PKH), and asked whether the program also reduced deforestation as a side benefit. By exploiting the staggered rollout of the program assignment across years (2008-2012), we use a fixed effect panel design to estimate the effect of PKH on forest loss. In its first five years, the PKH transferred cash to poor households in nearly 7500 forested villages. Although these cash transfers had no link to forest management, we estimate that exposure to the PKH reduced village-level annual tree cover loss by 28%. The economic value of the associated reduction in carbon emissions could cover the implementation costs of the PKH, even without including the other ecosystem services associated with reducing deforestation.
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