Your scenario would still fix half of the forest-wrecking, so yes it is. Additionally, there is now an incentive to become an ethical farmer for the remaining half.
No, in my scenario only half the farmers were wrecking the forest anyway. That did not change.
> Additionally, there is now an incentive to become an ethical farmer for the remaining half.
Perhaps, but also higher costs. They may still be less ethical then the unethical farmers.
This is analogous to the situation in electricity n markets and hydro production btw. Old hydro dams built in the 50s produce power for customers paying extra for "green power" and the money doesn't go to investments in wind/solar.