Does poverty cause forest degradation? Evidence from a poor state in India

There is a debate surrounding the nexus between poverty and environmental degradation. While the predominant school of thought argues that poverty is directly responsible for environmental degradation, another school of thought argues that poor do not have the resources which would force them cause environmental degradation. Empirical support for both the arguments, however, is based mostly on macro data. Using micro level data, this paper makes an attempt to examine whether poverty is a factor determining forest degradation in the state of Odisha in India. The study is carried out in two districts, divergent from each other in incidence of poverty, forest coverage and percentage of Scheduled Tribe population. The study finds no empirical evidence that poverty affects degradation of forest. On the other hand, there is evidence of forest degradation with the increase in income, though region specific. Hence, it is non-poor households than poor one who could be responsible for forest degradation. This result therefore does not support the downward spiral hypothesis and questions the assumption that poverty alleviation is an essential part of avoiding forest degradation. However, importance of poverty reduction cannot be overlooked, and effective forest management can be a way to address poverty.