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Forest Degradation and Economic Growth in Nepal, 2003–2010

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  • Jean-Marie Baland
  • François Libois
  • Dilip Mookherjee

Abstract

We investigate the relation between economic growth, household firewood collection, and forest conditions in Nepal between 2003 and 2010. Comovements in these are examined at the household and village levels, combining satellite imagery and household (Nepal Living Standard Measurement Survey) data. Projections of the impact of economic growth based on Engel curves turn out to be highly inaccurate: forest conditions remained stable despite considerable growth in household consumption and income. Firewood collections at the village level remained stable, as effects of demographic growth were offset by substantial reductions in per household collections. Households substituted firewood by alternative energy sources, particularly when livestock and farm-based occupations declined in importance. Engel curve specifications which include household productive assets (a proxy for occupational patterns) provide more accurate predictions. Hence structural changes accompanying economic growth play an important role in offsetting adverse environmental consequences of growth.

Suggested Citation

  • Jean-Marie Baland & François Libois & Dilip Mookherjee, 2018. "Forest Degradation and Economic Growth in Nepal, 2003–2010," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 401-439.
  • Handle: RePEc:ucp:jaerec:doi:10.1086/695690
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    1. repec:eee:deveco:v:138:y:2019:i:c:p:180-191 is not listed on IDEAS
    2. Boskovic, Branko & Chakravorty, Ujjayant & Pelli, Martino & Risch, Anna, 2018. "The Effect of Forest Access on the Market for Fuelwood in India," TSE Working Papers 18-925, Toulouse School of Economics (TSE).
    3. Vallino, Elena & Aldahsev,Gani, 2013. "NGOs and participatory conservation in developing countries: why are there inefficiencies?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201318, University of Turin.
    4. Branko Boškovic & Ujjayant Chakravorty & Martino Pelli & Anna Risch, 2018. "The Effect of Forest Access on the Market for Fuelwood in India," Working Papers 2018.21, Fondazione Eni Enrico Mattei.

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