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Trade Liberalisation and Global-scale Forest Transition

Author

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  • 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)

Abstract

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.

Suggested Citation

  • Rafael González-Val & Fernando Pueyo, 2013. "Trade Liberalisation and Global-scale Forest Transition," Working Papers 2013.70, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2013.70
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    More about this item

    Keywords

    Forest Transition; Natural Resources; Industrial Location; Trade Liberalisation;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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