IDEAS home Printed from
   My bibliography  Save this article

Fraud and free riding in tropical forests – on the potential for certification to enforce sustainable resource use indirectly


  • Lippert, Christian


Certification schemes for forest products are understood by many as a way to promote sustainable resource use when it is impossible to rely on direct enforcement of process standards. Based on the concept of ‘Self-Enforcing Contracts’, this study develops a market model that simulates the simultaneous partial equilibrium for both certified wood units and physically identical units that are produced without observing certain ecological standards. By illustrating the interplay of supply and demand in a world characterised by incomplete information, opportunistic behaviour and free riding, the model simulations, along with some empirical evidence from tropical forestry, indicate that certification will very likely fall short of preventing degradation of tropical forests. This is especially true in politically and economically unstable situations. Consequently, institutions other than markets are needed to govern the way natural resources are used. The problem of tropical forest degradation must be resolved primarily through forest legislation and improved governance structures and not through eco-labelling. Zertifizierungssysteme für Forstprodukte werden häufig als ein Weg gesehen, eine nachhaltige Ressourcennutzung auch dann zu befördern, wenn eine direkte Durchsetzung von Prozessstandards unmöglich erscheint. Ausgehend vom Konzept ‘sich selbst durchsetzender Vereinbarungen’ wird in diesem Beitrag ein Model entwickelt, um das simultane partielle Marktgleichgewicht sowohl für zertifiziertes als auch für physisch identisches Holz, das ohne Beachtung bestimmter Umweltstandards produziert wird, darzustellen. Dabei wird das Zusammenspiel von Angebot und Nachfrage in einer Welt, die durch unvollständige Information, opportunistisches Verhalten und das Auftreten von Trittbrettfahrern gekennzeichnet ist, simuliert. Die Modellsimulationen sowie einige empirische Anhaltspunkte aus dem Bereich der tropischen Forstwirtschaft legen nahe, dass die Zertifizierung alleine sehr wahrscheinlich nicht ausreichen wird, die weitere Degradation tropischer Wälder zu verhindern. Dies gilt vor allem für politisch und ökonomisch instabile Länder. Folglich bedarf es neben Märkten anderer Institutionen, um die Art und Weise, wie natürliche Ressourcen genutzt werden, zu steuern. Dem Problem der Tropenwaldzerstörung ist in erster Linie durch Forstgesetze sowie verbesserte Institutionen und nicht durch Umweltsiegel zu begegnen.

Suggested Citation

  • Lippert, Christian, 2009. "Fraud and free riding in tropical forests – on the potential for certification to enforce sustainable resource use indirectly," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(3).
  • Handle: RePEc:ags:gjagec:134178

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Engel, Stefanie, 2004. "Achieving environmental goals in a world of trade and hidden action: the role of trade policies and eco-labeling," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 1122-1145, November.
    2. Teisl, Mario F. & Roe, Brian & Hicks, Robert L., 2002. "Can Eco-Labels Tune a Market? Evidence from Dolphin-Safe Labeling," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 339-359, May.
    3. Nyborg, Karine & Howarth, Richard B. & Brekke, Kjell Arne, 2006. "Green consumers and public policy: On socially contingent moral motivation," Resource and Energy Economics, Elsevier, vol. 28(4), pages 351-366, November.
    4. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
    5. Eriksson, Ljusk Ola & Sallnas, Ola & Stahl, Goran, 2007. "Forest certification and Swedish wood supply," Forest Policy and Economics, Elsevier, vol. 9(5), pages 452-463, January.
    6. Roger A. Sedjo & Stephen K. Swallow, 2002. "Voluntary Eco-Labeling and the Price Premium," Land Economics, University of Wisconsin Press, vol. 78(2), pages 272-284.
    7. Caviglia-Harris, Jill L. & Kahn, James R. & Green, Trellis, 2003. "Demand-side policies for environmental protection and sustainable usage of renewable resources," Ecological Economics, Elsevier, vol. 45(1), pages 119-132, April.
    8. Edward B. Barbier, 2004. "Explaining Agricultural Land Expansion and Deforestation in Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1347-1353.
    9. Henrik Vetter & Kostas Karantininis, 2002. "Moral hazard, vertical integration, and public monitoring in credence goods," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(2), pages 271-279, June.
    10. van Kooten, G. Cornelis & Nelson, Harry W. & Vertinsky, Ilan, 2005. "Certification of sustainable forest management practices: a global perspective on why countries certify," Forest Policy and Economics, Elsevier, vol. 7(6), pages 857-867, November.
    11. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    12. Murray, Brian C. & Abt, Robert C., 2001. "Estimating price compensation requirements for eco-certified forestry," Ecological Economics, Elsevier, vol. 36(1), pages 149-163, January.
    13. Bjorner, Thomas Bue & Hansen, L.G.Lars Garn & Russell, Clifford S., 2004. "Environmental labeling and consumers' choice--an empirical analysis of the effect of the Nordic Swan," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 411-434, May.
    14. Paul Ferraro & Toshihiro Uchida & Jon Conrad, 2005. "Price Premiums for Eco-friendly Commodities: Are ‘Green’ Markets the Best Way to Protect Endangered Ecosystems?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(3), pages 419-438, November.
    15. Stefanie Kirchhoff, 2000. "Green Business and Blue Angels," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(4), pages 403-420, April.
    16. Hamilton, Stephen F. & Zilberman, David, 2006. "Green markets, eco-certification, and equilibrium fraud," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 627-644, November.
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:gjagec:134178. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.