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The economics of tropical deforestation

Balboni, Clare, Berman, Aaron, Burgess, Robin and Olken, Benjamin A. (2023) The economics of tropical deforestation. Annual Review of Economics, 15. 723 – 754. ISSN 1941-1383

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Identification Number: 10.1146/annurev-economics-090622-024705

Abstract

Two factors have elevated recent academic and policy interest in tropical deforestation: first, the realization that it is a major contributor to climate change; and second, a revolution in satellite-based measurement that has revealed that it is proceeding at a rapid rate. We begin by reviewing the methodological advances that have enabled measurement of forest loss at a fine spatial resolution across the globe. We then develop a simple benchmark model of deforestation based on classic models of natural resource extraction. Extending this approach to incorporate features that characterize deforestation in developing countries—pressure for land use change, significant local and global externalities, weak property rights, and political economy constraints—provides us with a framework for reviewing the fast-growing empirical literature on the economics of deforestation in the tropics. This combination of theory and empirics provides insights not only into the economic drivers and impacts of tropical deforestation but also into policies that may affect its progression. We conclude by identifying areas where more work is needed in this important body of research.

Item Type: Article
Official URL: https://www.annualreviews.org/journal/economics
Additional Information: © 2023 The Authors
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
G Geography. Anthropology. Recreation > GE Environmental Sciences
JEL classification: F - International Economics > F1 - Trade > F18 - Trade and Environment
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q23 - Forestry
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting; Environmental Equity
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics
Date Deposited: 29 Aug 2023 09:57
Last Modified: 09 Jun 2024 20:24
URI: http://eprints.lse.ac.uk/id/eprint/120074

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