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Following the Rules: Brazilian Logging Concessions under Imperfect Enforcement and Royalties

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  • Alexander J. Macpherson
  • Douglas R. Carter
  • Marco W. Lentini
  • Mark D. Schulze

Abstract

Debates about forest concessions in the Brazilian Amazon have focused on the government’s enforcement capacity. Using an optimization model largely parameterized with data from the Eastern Amazon, we investigate the effectiveness of renewability audits and performance bonds in inducing compliance with reduced-impact logging and harvest volume requirements. In weak enforcement environments, audits are unlikely to induce full compliance with harvest regulations, while performance bonds may be more effective. The use of royalty instruments such as the ad valorem and revenue-based royalties can generate revenues and, in the case of revenue-based instruments, modify harvest behavior, but only under limited circumstances.

Suggested Citation

  • Alexander J. Macpherson & Douglas R. Carter & Marco W. Lentini & Mark D. Schulze, 2010. "Following the Rules: Brazilian Logging Concessions under Imperfect Enforcement and Royalties," Land Economics, University of Wisconsin Press, vol. 86(3).
    • Handle: RePEc:uwp:landec:v:86:y:2010:iii:1:p493-513
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    References listed on IDEAS

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    1. Marco Boscolo & Jeffrey R. Vincent, 2000. "Promoting Better Logging Practices in Tropical Forests: A Simulation Analysis of Alternative Regulations," Land Economics, University of Wisconsin Press, vol. 76(1), pages 1-14.
    2. By Luc Leruth & Remi Paris & Ivan Ruzicka, 2001. "The Complier Pays Principle: The Limits of Fiscal Approaches Toward Sustainable Forest Management," IMF Staff Papers, Palgrave Macmillan, vol. 48(2), pages 1-8.
    3. Conrad, Robert F. & Gillis, Malcolm & Mercer, D. Evan, 2005. "Tropical forest harvesting and taxation: a dynamic model of harvesting behavior under selective extraction systems," Environment and Development Economics, Cambridge University Press, vol. 10(5), pages 689-709, October.
    4. William F. Hyde & Roger A. Sedjo, 1992. "Managing Tropical Forests: Reflections on the Rent Distribution Discussion," Land Economics, University of Wisconsin Press, vol. 68(3), pages 343-350.
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    1. Kuusela, O.P. & Amacher, G.S. & Moeltner, K., 23. "Performance Bonds in Tropical Timber Concessions: Encouraging the Adoption of Reduced Impact Logging Techniques," Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, Scandinavian Society of Forest Economics, issue 44, May.
    2. Kuusela, Olli-Pekka & Amacher, Gregory S. & Moeltner, Klaus, 2017. "Enforcing the rules in timber concessions: Performance bonding in the presence of corruption risk," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 52-64.

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    More about this item

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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