Abstract
Trade interventions are increasingly advocated as a means for controlling timber-related tropical deforestation. This paper analyzes the impact on deforestation of such policy instruments in a dynamic framework. The forest is modelled as a potentially renewable resource, and timber is extracted for purposes of export and domestic consumption. Optimality conditions for a variety of model specifications are derived, and the impacts of changes in the terms of trade and market structure on long-run deforestation are analyzed. The results of this analysis suggest that trade interventions that seek to affect the terms of trade against the export of tropical timber products are in the long run a second-best policy option for influencing the deforestation process.
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We would like to thank Joanne Burgess for contributing to discussions that resulted in this paper, which were held at the Beijer Institute of Ecological Economics of the Royal Swedish Academy of Sciences. We acknowledge the financial support given by the Beijer Institute and the hospitality of its staff, and in particular we are grateful to Prof. Karl-Göran Mäler for inviting us to use the facilities at Beijer and to Charles Perrings, Director of the Biodiversity Programme. Additional support for Edward Barbier's participation in the research was also provided by the International Tropical Timber Organization, under contract no. PCM(XI)/4, “Economic Linkages Between the International Trade in Tropical Timber and the Sustainable Management of Tropical Forests”. We are grateful to comments provided by two anonymous referees; however, the usual disclaimer applies.
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Barbier, E.B., Rauscher, M. Trade, tropical deforestation and policy interventions. Environ Resource Econ 4, 75–90 (1994). https://doi.org/10.1007/BF00691933
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DOI: https://doi.org/10.1007/BF00691933