Import restrictions by eco-certification: Quantity effects on tropical timber production

Eco-certification standards are increasingly used by industrial countries to restrict imports of foreign goods produced using unsustainable practices. Import restrictions on eco-certified goods limit the trade of goods to the home country, but also serve to segment global demand into separate regions for conventional goods and certified goods, altering market structure and equilibrium prices in a manner that can work against sustainability goals. In this paper, we examine the effect of recent import restrictions in the US, EU, Canada, and Japan that require tropical timber products produced in Central Africa to be eco-certified. Using panel data of timber production in Cameroon from 2003 to 2009, we show that conventional timber producers substantially increase harvest rates in response to eco-certification standards. Our findings suggest that import restrictions on tropical timber products shifted production to forests with higher extraction costs, exacerbating economic inefficiency and potentially raising marginal damages from timber extraction.