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Tropical Deforestation: Markets and Market Failures

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  • Todd Sandler

Abstract

Activities to curb deforestation yield private goods, country-specific public goods, and global public goods. Markets can operate for the private goods, while nations are motivated to strike bargains with one another over country-specific public goods. Suboptimality stems from the global public goods and the positive externalities associated with preservation activities. This suboptimality can be attenuated if the developed countries establish property rights to genetic material gathered from the rain forests. Since much of the global public benefits is derived by the developed countries, they are in a weak bargaining position with respect to the shrinking rain forests.

Suggested Citation

  • Todd Sandler, 1993. "Tropical Deforestation: Markets and Market Failures," Land Economics, University of Wisconsin Press, vol. 69(3), pages 225-233.
  • Handle: RePEc:uwp:landec:v:69:y:1993:i:3:p:225-233
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    Cited by:

    1. Luz Angela Rodríguez Ramírez, 2006. "Determinantes De Las Decisiones De Conservación De Áreas Naturales: Un Análisis Desde La Perspectiva Pública Y Privada," Documentos CEDE 2322, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Thomas Eichner & Rüdiger Pethig, 2019. "Coaseian Biodiversity Conservation and Market Power," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(3), pages 849-873, March.
    3. Nick Hanley & Clive Spash & Lorna Walker, 1995. "Problems in valuing the benefits of biodiversity protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(3), pages 249-272, April.
    4. Robert Kohn, 1995. "Salvatore model with equiproportional preservation of forests," Open Economies Review, Springer, vol. 6(1), pages 63-79, January.
    5. Schwartz, S. & Choumert-Nkolo, J. & Combes, J.-L. & Combes-Motel, P. & Kere, E., 2022. "Optimal protected area implementation under spillover effects," Resource and Energy Economics, Elsevier, vol. 68(C).
    6. Berman, Nicolas & Couttenier, Mathieu & Leblois, Antoine & Soubeyran, Raphael, 2023. "Crop prices and deforestation in the tropics," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    7. Sonia Schwartz & Johanna Choumert-Nkolo & Jean-Louis Combes & Pascale Combes Motel & Éric Nazindigouba Kere, 2019. "On the optimal setting of protected areas," CERDI Working papers halshs-02082753, HAL.
    8. Kant, Shashi, 2003. "Extending the boundaries of forest economics," Forest Policy and Economics, Elsevier, vol. 5(1), pages 39-56, January.
    9. Robert Innes & George Frisvold, 2009. "The Economics of Endangered Species," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 485-512, September.
    10. Farley, Josh & Aquino, André & Daniels, Amy & Moulaert, Azur & Lee, Dan & Krause, Abby, 2010. "Global mechanisms for sustaining and enhancing PES schemes," Ecological Economics, Elsevier, vol. 69(11), pages 2075-2084, September.
    11. Deke, Oliver, 2004. "Financing National Protected Area Networks Internationally: The Global Environment Facility as a Multilateral Mechanism of Transfer," Kiel Working Papers 1227, Kiel Institute for the World Economy (IfW Kiel).
    12. Brancalion, Pedro H.S. & Lamb, David & Ceccon, Eliane & Boucher, Doug & Herbohn, John & Strassburg, Bernardo & Edwards, David P., 2017. "Using markets to leverage investment in forest and landscape restoration in the tropics," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 103-113.
    13. Eichner, Thomas & Pethig, Rüdiger, 2016. "Coaseian biodiversity conservation. Who benefits?," VfS Annual Conference 2016 (Augsburg): Demographic Change 145745, Verein für Socialpolitik / German Economic Association.
    14. R. Thiele, 1995. "Conserving Tropical Rain Forests In Indonesia: A Quantitative Assessment Of Alternative Policies," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 187-200, May.
    15. Farley, Joshua & Costanza, Robert & Flomenhoft, Gary & Kirk, Daniel, 2015. "The Vermont Common Assets Trust: An institution for sustainable, just and efficient resource allocation," Ecological Economics, Elsevier, vol. 109(C), pages 71-79.
    16. Deke, Oliver, 2004. "Internalizing Global Externalities from Biodiversity: Protected Areas and Multilateral Mechanisms of Transfer," Kiel Working Papers 1226, Kiel Institute for the World Economy (IfW Kiel).
    17. Chambers, Paul E. & Jensen, Richard & Whitehead, John C., 1996. "Debt-for-nature swaps as noncooperative outcomes," Ecological Economics, Elsevier, vol. 19(2), pages 135-146, November.
    18. Murtazashvili, Ilia & Murtazashvili, Jennifer & Salahodjaev, Raufhon, 2019. "Trust and deforestation: A cross-country comparison," Forest Policy and Economics, Elsevier, vol. 101(C), pages 111-119.

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