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Tropical rainforests are critically important in providing a range of ecosystem services, especially as a host to biodiversity and a store of carbon. Many environmentalists

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Tropical rainforests are critically important in providing a range of ecosystem services, especially as a host to biodiversity and a store of carbon. Many environmentalists believe that they are being converted to other land uses (farming) too rapidly due to a failure of market price signals to reflect the wide range of national and global benefits that rainforests provide, and that this process is causing profound damage to the world's environment and ecosystems. Without government intervention, rates of deforestation may continue to be above the social optimal level in many countries. The following figure illustrates the national and global marginal damages from deforestation and the marginal abatement cost of forest preservation: MD obal 14 MAC 13 d 12 MD national ar 1, h X x x, X, X (forest area cleared) 40. If the forest is open access and there are no effective policies for its protection in place, the area of forest cleared will be 41. If only national benefits of forest preservation are recognized and effective national policies for its protection are in place, the area of forest cleared will be 42. If only national benefits of forest preservation are recognized, then an effective national policy for its protection may be a tax of $ per area of forest cleared. 43. If effective national policies to protect the forest recognize only national benefits, then to achieve the social optimal level of forest preservation it would be necessary for the international community to pay the tropical nation at least the area 44. An international agreement to pay tropical nations for preserving more of their forests would be plagued by what kind of problem? 45. International payments to tropical nations to preserve more of their forests can be derived from of the Paris Agreement.ee

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