Fight fire with finance: a randomized field experiment to curtail land-clearing fire in Indonesia

Abstract

This paper presents a randomized evaluation of collective pay-for-performance payments for ecosystem services. We test whether community-level fiscal incentives can curtail the use of land clearing fire, a major source of emissions and negative health externalities, in a critical low regulation setting. The program was implemented over the 2018 fire season in Indonesia as a three-part bundle: (a) awareness raising and training on fire prevention, (b) a small capital grant to mobilize fire fighting resources, and (c) the promise of a large conditional cash transfer at the end of the year if the village does not have fire, which we monitor by satellite. While program villages increase fire prevention efforts, we find no evidence of any large or statistically significant differences in fire outcomes. The null result is likely driven by a combination of the payment not being large enough and collective action failure, and offers a cautionary tale on the importance of carefully measuring additionality when evaluating payments for environmental services and other conservation programs. Show more