The Tropical Forests as a Global Resource: Impacts of Trade-Related Policy
AbstractThis paper analyses the impacts of trade and trade policy on tropical deforestation. Distinctions are made between the different costs and benefits pertaining to forest use, their distribution and natural vis-à-vis industrial forest features. It is emphasized that forest management is determined by the incentives that confront the relevant actors, and their interdependent behavior. International trade is not a major cause of deforestation, and barriers to log exports worsen the situation. While trade liberalization and consumer action are argued to have a potential for favorable impacts through pressure for institutional reform, a socially optimal management of the tropical forests requires that presently non-commercial values be taken into account. As producer countries face considerable difficulties in exploiting biological diversity, compensation for absorption of CO2, e.g., in a market for tradable carbon rights, stands out as the best opportunity to narrow the gap between private and social benefits. While problems such as those associated with moral hazard would have to be overcome, such a scheme should seek to correct the present policy and market failures spurring deforestation and favoring industrial rather than natural forest features.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 187.
Length: 39 pages
Date of creation: 26 Aug 1997
Date of revision: 01 Nov 1997
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More information through EDIRC
Deforestation and trade policy; forest management and industrial vs.natural forest features; tropical timber trade; economic benefits of biological diversity; CO2-emission and absorption rights;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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