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Urban deforestation and urban development

Author

Listed:
  • Maria A. Cunha-e-Sa
  • Sofia F. Franco
  • Renato Rosa

Abstract

This paper has developed a model of a single forest owner operating with perfect foresight in a dynamic open-city environment that allows for switching between alternative competing land uses (forest and urban use) at some point in the future. The model also incorporates external values of an even-aged standing forest in addition to the value of timber when it is harvested. Timber is exploited based on a multiple rotation model a la Faustmann with clear-cut harvesting. In contrast to previous models, our alternative land use to forest land is endogenous. Within this framework, we study the problem of the private owner as well as that of the social planner, when choosing the time to harvest, the time to convert land and the intensity of development. We also examine the extent to which the two-way linkage between urban development and forest management practices (timber production and provision of forest amenities) contributes to economic efficiency and improvements in non-market forest benefits. Finally, we consider policy options available to a regulator seeking to achieve improvements in efficiency including anti-sprawl policies (impact fees and density controls) and forest policies such a yield tax. Numerical simulations illustrate our analytical results.

Suggested Citation

  • Maria A. Cunha-e-Sa & Sofia F. Franco & Renato Rosa, 2012. "Urban deforestation and urban development," Nova SBE Working Paper Series wp559, Universidade Nova de Lisboa, Nova School of Business and Economics.
    • Handle: RePEc:unl:unlfep:wp559
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    References listed on IDEAS

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    3. Koskela, Erkki & Ollikainen, Markku, 2001. "Forest Taxation and Rotation Age under Private Amenity Valuation: New Results," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 374-384, November.
    4. Englin, Jeffrey E. & Klan, Mark S., 1990. "Optimal taxation: Timber and externalities," Journal of Environmental Economics and Management, Elsevier, vol. 18(3), pages 263-275, May.
    5. Swallow, Stephen K. & Parks, Peter J. & Wear, David N., 1990. "Policy-relevant nonconvexities in the production of multiple forest benefits," Journal of Environmental Economics and Management, Elsevier, vol. 19(3), pages 264-280, November.
    6. Gary Wolfram, 1981. "The Sale of Development Rights and Zoning in the Preservation of Open Space: Lindahl Equilibrium and a Case Study," Land Economics, University of Wisconsin Press, vol. 57(3), pages 398-413.
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    Keywords

    Deforestation; urban development; forest management practices; anti-sprawl policies; yield taxes;
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