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Crop Prices and Deforestation in the Tropics

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  • Nicolas Berman

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research)

  • Mathieu Couttenier

    (ENS de Lyon - École normale supérieure de Lyon, CEPR - Center for Economic Policy Research)

  • Antoine Leblois

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro - Montpellier SupAgro - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Raphaël Soubeyran

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro - Montpellier SupAgro - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

Abstract

Global food demand is rising, pushed by growing world population and dietary changes in developing countries. This encourages farmers to increase crop production which, in turn, increases worldwide demand for agricultural land and the pressure on tropical forests. With a possible doubling of world food demand by 2050, this pressure is not likely to decrease in the next decades. While the impact of food demand on deforestation has been pushed forward in the medias, rigorous evidence using large-N data estimating the causal impact of crop price variations on deforestation remains scarce. Here, we quantify this impact over the twenty first century using high resolution annual forest loss data across the tropics, combined with information about crop-specific agricultural suitability and annual international commodity prices. We find a sizeable impact of price variations on deforestation: crop price variations are estimated to have contributed to 35% of the total predicted deforestation in the tropics over the period 2001-2018. We also highlight that the degree of openness to international trade and level of economic development are first-order local characteristics to explain the magnitude of the impact of crop prices on deforestation.

Suggested Citation

  • Nicolas Berman & Mathieu Couttenier & Antoine Leblois & Raphaël Soubeyran, 2021. "Crop Prices and Deforestation in the Tropics," CEE-M Working Papers hal-03352884, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    • Handle: RePEc:hal:wpceem:hal-03352884
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03352884
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    5. 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).
    6. Leal, Alan & Bugarin, Maurício, 2024. "There is Trouble with the Trees: How to Avoid Trade-Induced Deforestation?," TD NEREUS 5-2024, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).

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    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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