The effect of forest access on the market for fuelwood in India

Fuelwood collection by poor people is often cited as the most important cause of deforestation in developing countries. Using household survey data from India, we show that households located farther away from the forest spend more time in fuelwood collection. These households are likely to sell more fuelwood and buy less. That is, reduced access to forests increases fuelwood collection and sale. This counter-intuitive behavior is triggered by the higher fixed costs of households living farther from the forest arising from larger travel times. By combining two different datasets, we can quantify net fuelwood sales out of a village. We show that a fifth of the fuelwood collected is consumed outside of rural areas, in nearby towns and cities. Our estimates suggest that fuelwood burning may account for roughly 14%-20% of the typical daily PM2.5 load in a city like New Delhi.