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Efficient Technology and the Conservation of Natural Forests: Evidence from Sri Lanka

Author

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  • Gunatilake, Herath

    (Asian Development Bank)

Abstract

Existing policy instruments for conserving tropical forests have shown limited success. This paper investigates the feasibility of improving the technical efficiency of the wood processing industry as an alternative approach to forest conservation, using sawmills in Sri Lanka as a case study. Improved wood processing efficiency decreases the volume of raw material (logs) required to produce a given quantity of processed wood products and, therefore, decreases the pressure on natural forests. A stochastic frontier production function was estimated to assess the technical efficiency of sawmilling in Sri Lanka. Given the considerable inefficiency found in sawmilling operations, current sawn wood output can be obtained with 28% less inputs. Compared with other policy measures, technical efficiency improvement has a potential to play a noteworthy role in conserving natural forests. Technological improvements, as a tool for conservation, deserve the attention of researchers and policy makers.

Suggested Citation

  • Gunatilake, Herath, 2007. "Efficient Technology and the Conservation of Natural Forests: Evidence from Sri Lanka," ADB Economics Working Paper Series 105, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0105
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    More about this item

    Keywords

    conservation; efficiency improvement; Sri Lanka; technical efficiency; wood processing industry;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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