IDEAS home Printed from https://ideas.repec.org/p/wsu/wpaper/galinato-10.html
   My bibliography  Save this paper

The Role of Government Spending on Deforestation and Carbon Dioxide Emissions from Land Use Change

Author

Listed:
  • Gregmar Galinato
  • Suzette Galinato

    () (School of Economic Sciences, Washington State University)

Abstract

There has been a shift in fiscal policies in developing countries with good quality institutions. Government spending is less likely to be procyclical and instead countercyclical where spending rises during times of recession and falls during times of expansion to reduce the effects of the business cycle. We show using a theoretical model that moving towards a countercyclical spending pattern yields an unintended consequence: during times of recession there is an increase in deforestation and carbon dioxide emissions from land use change. We empirically test the results from our theoretical model and find that an increase in total government spending significantly increases forest land clearing for agricultural production in the short run leading to more carbon dioxide emissions. In the long run, there is a lower steady-state forest biomass and carbon dioxide emissions are significantly higher than in the short run.

Suggested Citation

  • Gregmar Galinato & Suzette Galinato, 2013. "The Role of Government Spending on Deforestation and Carbon Dioxide Emissions from Land Use Change," Working Papers 2013-14, School of Economic Sciences, Washington State University.
  • Handle: RePEc:wsu:wpaper:galinato-10
    as

    Download full text from publisher

    File URL: http://faculty.ses.wsu.edu/WorkingPapers/Galinato/WP2013-14.pdf
    File Function: First version, 2013
    Download Restriction: no

    References listed on IDEAS

    as
    1. López, Ramón & Galinato, Gregmar I. & Islam, Asif, 2011. "Fiscal spending and the environment: Theory and empirics," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 180-198, September.
    2. Antony K. Samarawickrema & Ken W. Belcher, 2005. "Net Greenhouse Gas Emissions and the Economics of Annual Crop Management Systems," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 385-401, December.
    3. Shenggen Fan & Xiaobo Zhang, 2008. "Public Expenditure, Growth and Poverty Reduction in Rural Uganda," African Development Review, African Development Bank, vol. 20(3), pages 466-496.
    4. Galinato, Gregmar I. & Galinato, Suzette P., 2012. "The effects of corruption control, political stability and economic growth on deforestation-induced carbon dioxide emissions," Environment and Development Economics, Cambridge University Press, vol. 17(01), pages 67-90, February.
    5. Kenneth M. Chomitz & Timothy S. Thomas, 2003. "Determinants of Land Use in Amazônia: A Fine-Scale Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1016-1028.
    6. Halkos, George E. & Paizanos, Epameinondas Α., 2013. "The effect of government expenditure on the environment:An empirical investigation," Ecological Economics, Elsevier, vol. 91(C), pages 48-56.
    7. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
    8. Lopez, Ramon & Galinato, Gregmar I., 2007. "Should governments stop subsidies to private goods? Evidence from rural Latin America," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1071-1094, June.
    9. López, Ramón & Palacios, Amparo, 2011. "Why Europe has become environmentally cleaner: Decomposing the roles of fiscal, trade and environmental policies," CEPR Discussion Papers 8551, C.E.P.R. Discussion Papers.
    10. Antle, John M & Heidebrink, Gregg, 1995. "Environment and Development: Theory and International Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 43(3), pages 603-625, April.
    11. Cline-Cole, R. A. & Main, H. A. C. & Nichol, J. E., 1990. "On fuelwood consumption, population dynamics and deforestation in Africa," World Development, Elsevier, vol. 18(4), pages 513-527, April.
    12. Galinato, Gregmar I. & Galinato, Suzette P., 2013. "The short-run and long-run effects of corruption control and political stability on forest cover," Ecological Economics, Elsevier, vol. 89(C), pages 153-161.
    13. Bulte, Erwin H. & Damania, Richard & Lopez, Ramon, 2007. "On the gains of committing to inefficiency: Corruption, deforestation and low land productivity in Latin America," Journal of Environmental Economics and Management, Elsevier, vol. 54(3), pages 277-295, November.
    14. Naughton-Treves, Lisa, 2004. "Deforestation and Carbon Emissions at Tropical Frontiers: A Case Study from the Peruvian Amazon," World Development, Elsevier, vol. 32(1), pages 173-190, January.
    15. Shafik, Nemat, 1994. "Economic Development and Environmental Quality: An Econometric Analysis," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 757-773, Supplemen.
    16. Cropper, Maureen & Griffiths, Charles, 1994. "The Interaction of Population Growth and Environmental Quality," American Economic Review, American Economic Association, vol. 84(2), pages 250-254, May.
    17. Ramón López & Gregmar I. Galinato, 2005. "Trade Policies, Economic Growth, and the Direct Causes of Deforestation," Land Economics, University of Wisconsin Press, vol. 81(2).
    18. Maureen Cropper & Jyotsna Puri & Charles Griffiths, 2001. "Predicting the Location of Deforestation: The Role of Roads and Protected Areas in North Thailand," Land Economics, University of Wisconsin Press, vol. 77(2), pages 172-186.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Combes, J.-L. & Combes Motel, P. & Minea, A. & Villieu, P., 2015. "Deforestation and seigniorage in developing countries: A tradeoff?," Ecological Economics, Elsevier, vol. 116(C), pages 220-230.
    2. Jean-Louis COMBES & Pascale COMBES MOTEL & Philippe DELACOTE, 2014. "Public expenses, credit and natural capital: Substitution or complementarity?," Working Papers 201409, CERDI.
    3. repec:eee:ecolec:v:144:y:2018:i:c:p:214-227 is not listed on IDEAS

    More about this item

    Keywords

    Carbon dioxide emission; deforestation; government spending; public goods expenditure;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsu:wpaper:galinato-10. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Danielle Engelhardt). General contact details of provider: http://edirc.repec.org/data/ecwsuus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.