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Trade Liberalisation and Global-scale Forest Transition

  • Rafael González-Val

    (Universidad de Zaragoza & Institut d'Economia de Barcelona (IEB), Departamento de Análisis Económico)

  • Fernando Pueyo

    (Universidad de Zaragoza, Departamento de Análisis Económico)

In this paper, we develop a theoretical model that provides an additional explanation for the forest transition based on a trade liberalisation scenario. Furthermore, in contrast with most explanations, in which the forest transition can only take place at a local level at the expense of other areas, ours is capable of supporting such phenomenon at a worldwide level. We introduce a renewable natural resource (wood), used as an input by manufacturing firms, in a framework with economic geography foundations: transport costs affect the distribution of firms between countries. In a general equilibrium, the results reproduce the forest transition at a global scale: a decrease in transport costs (in particular, that of the natural resource) has a negative effect on the worldwide stock of the natural resource in the short-term; however, this effect is offset during the transition as a consequence of industrial reallocation between countries and eventually disappears in the long-run.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2013.70.

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Date of creation: Jul 2013
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Handle: RePEc:fem:femwpa:2013.70
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  1. Gardner Brown, 2000. "Renewable Natural Resource Management and Use Without Markets," Discussion Papers in Economics at the University of Washington 0025, Department of Economics at the University of Washington.
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  11. Pfaff, Alexander S. P., 1999. "What Drives Deforestation in the Brazilian Amazon?: Evidence from Satellite and Socioeconomic Data," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 26-43, January.
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  15. repec:cup:cbooks:9780521811972 is not listed on IDEAS
  16. Gardner M. Brown, 2000. "Renewable Natural Resource Management and Use without Markets," Journal of Economic Literature, American Economic Association, vol. 38(4), pages 875-914, December.
  17. Myllyntaus, Timo & Mattila, Timo, 2002. "Decline or increase? The standing timber stock in Finland, 1800-1997," Ecological Economics, Elsevier, vol. 41(2), pages 271-288, May.
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