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Timber concessions in Madre de Dios: Are they a good deal?

Listed author(s):
  • Giudice, Renzo
  • Soares-Filho, Britaldo S.
  • Merry, Frank
  • Rodrigues, Hermann O.
  • Bowman, Maria
Registered author(s):

    This study contributes to the design of public policies for the forestry sector in Madre de Dios, Peru. We developed a timber rent model that estimates optimal stumpage fees and compared three scenarios of harvestable areas access versus two harvest methods to calculate potential revenues to the State. We found that current stumpage fees undervalue timber resources and thus provide windfall profits to loggers. Annual forest revenues to the State could be increased from US$1 million to a maximum annual average of US$23.4±1.4 million over a 20-year period if the fee structure suggested from our estimations were adopted. Similarly, we show that the spatial distribution of current fees encourages timber harvesting outside of timber concessions, in particular from Brazil-nut concessions, which compete with timber concessions to supply timber to markets. Our results suggest that timber harvesting should be limited to a maximum volume of 5m3/ha inside Brazil-nut concessions and that timber harvesting in all Madre de Dios could be increased by up to ~200% over the next 20years without threatening conservation areas. This would in turn provide additional revenues to the State that could be applied to better monitoring and forest management.

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    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 77 (2012)
    Issue (Month): C ()
    Pages: 158-165

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    Handle: RePEc:eee:ecolec:v:77:y:2012:i:c:p:158-165
    DOI: 10.1016/j.ecolecon.2012.02.024
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    1. Gregory S. Amacher & Richard J. Brazee & Meindert Witvliet, 2001. "Royalty Systems, Government Revenues, and Forest Condition: An Application from Malaysia," Land Economics, University of Wisconsin Press, vol. 77(2), pages 300-313.
    2. Gutierrez-Velez, Victor Hugo & MacDicken, Kenneth, 2008. "Quantifying the direct social and governmental costs of illegal logging in the Bolivian, Brazilian, and Peruvian Amazon," Forest Policy and Economics, Elsevier, vol. 10(4), pages 248-256, February.
    3. Stone, Steven W., 1998. "Using a geographic information system for applied policy analysis: the case of logging in the Eastern Amazon," Ecological Economics, Elsevier, vol. 27(1), pages 43-61, October.
    4. José Luis Bonifaz & Roberto Urrunaga (ed.), 2008. "Estimación de los beneficios económicos de la carretera Interoceánica," Books, Fondo Editorial, Universidad del Pacífico, edition 1, volume 1, number 08-11.
    5. Smith, Joyotee & Colan, Violeta & Sabogal, Cesar & Snook, Laura, 2006. "Why policy reforms fail to improve logging practices: The role of governance and norms in Peru," Forest Policy and Economics, Elsevier, vol. 8(4), pages 458-469, June.
    6. Roberto Urrunaga & José Luis Bonifaz (ed.), 2008. "Beneficios económicos de la carretera Interoceánica," Books, Fondo Editorial, Universidad del Pacífico, edition 1, volume 1, number 08-02.
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