AGEC/FNR 406 LECTURE 31

Former tropical forest…

TROPICAL FORESTS

• Located between tropics of Capricorn and Cancer

• At least 10 percent woody cover• Important source of carbon sequestration• Biologically different than temperate forests

– Nutrients stored in biomass of plant, not in soil– Forest structure more complex– Soil less stable

Central Concern

Are forests “luxury” goods?

Can only “rich” countries afford to maintain sustainable forest cover?

What happens in the face of growing populations that displace traditional economic and cultural practices?

Causes of deforestation

• Timbering - cutting trees for commercial use

• Fuel wood gathering

• Conversion to crop and pasture (rangelands)– Subsistence – Commercial

Implications of deforestation

• Internal - local activity not sustainable

• Global - benefits from non-marketed global public goods are not being considered or properly valued– Ecosystem services and habitat– Watershed functions– Carbon sequestration

Reasons for excessive deforestation, I

• Underlying theme is “market failure”– Lack of markets for public goods– Inefficient property rights structure

• Poverty– current consumption needs, low investment– high discount rates

• High costs of forest monitoring and law enforcement

• Poor concessionaire agreements– Government leases cutting rights to timber

companies

• Subsidies for alternative land uses– Promote migration from urban to rural areas

• Lack of adequate property rights– No incentive for users to protect resource– Scarcity rent dissipated

Reasons for excessive deforestation, II

• Underlying economic conditions– Lack of markets– Subsistence agriculture– Promotion of cash crops for export

• Underlying social conditions– Forced conversion from traditional social

structure to centralized government– Increased population

Reasons for excessive deforestation, III

Timbering activities

• Sustainable level of harvest not followed– Open access resource in many places– Regulations established in many countries

• Developed countries have funded forestry “development” projects

– Lack of political will and resources to enforce• Export earnings tied to timber products• Politically risky to interfere with loggers

Fuelwood

• Open access resource– Community regulation of the commons fails

• No affordable substitutes

• Used inefficiently

Conversion to other land uses

• Slash and burn agriculture sustainable in traditional cultures

• Level of clearing increased to un-sustainable levels– Population growth and migration

• squatters interfere with stability of indigenous cultures

– Increased access to forests by logging roads– Government promotion of cash crops for export

Macroeconomic reasons for tropical deforestation

Economic conditions prevent countries from acting in their long-term interests:

1. Social and economic costs of enforcing regulations are high

2. Debt and reliance on imports requires export earnings. Intervention by developed countries can have greatest impact on this category of reasons for deforestation (e.g. debt for nature swaps).

Can market mechanisms promote forest protection?

• Tradable carbon credits

• Development of export markets for non-timber forest products

• Debt-for-nature swaps