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Trade Liberalisation and Global-scale Forest Transition

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  • González-Val, Rafael
  • Fernando, Pueyo

Abstract

In this paper, we develop a theoretical model that provides an additional explanation for the forest transition based on a trade liberalisation scenario. Furthermore, in contrast with most explanations, in which the forest transition can only take place at a local level at the expense of other areas, ours is capable of supporting such phenomenon at a worldwide level. We introduce a renewable natural resource (wood), used as an input by manufacturing firms, in a framework with economic geography foundations: transport costs affect the distribution of firms between countries. In a general equilibrium, the results reproduce the forest transition at a global scale: a decrease in transport costs (in particular, that of the natural resource) has a negative effect on the worldwide stock of the natural resource in the short-term; however, this effect is offset during the transition as a consequence of industrial reallocation between countries and eventually disappears in the long-run.

Suggested Citation

  • González-Val, Rafael & Fernando, Pueyo, 2013. "Trade Liberalisation and Global-scale Forest Transition," Climate Change and Sustainable Development 156843, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:156843
    DOI: 10.22004/ag.econ.156843
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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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