A Mexican government program incentivizing tree planting in order for the country to meet climate goals has been linked, rather paradoxically, with increased deforestation, said Bloomberg.

The program essentially pays people to grow trees on their land as a way to not only improve the environment but strengthen the local economy as well by creating new industries in impoverished rural areas. But in 2019, the first full year of the program's existence, Mexico wound up with fewer trees, not more, as an area roughly the size of New York City has been lost to deforestation, a rate twice the general average.

The problem seems to be one of perverse incentives. In contrast to previous programs, the subsidies reward not maintaining already existing trees but planting new ones, and the money goes directly to the farmer rather the local community. Basically, people are chopping down old trees so they can take part in the program by planting new trees in their place. This was especially the case in 2020, when Mexico's economy plunged along with the rest of the world, leading people to chop trees at an even more furious pace (the extent of which is still untallied) to get the tree planting subsidy.

It is, in a sense, a fun house mirror version of another green-capitalist scandal from last year:A company that purportedly makes money from planting trees to combat climate change was found to have been counting already-existing forests as the product of its efforts and reaping the green financial incentives in the process. Both incidents underscore the importance of incentives in shaping behavior, as well as the need to seriously consider unexpected effects.