Reduced Deforestation and Economic Growth

Author

Patrick Doupe (patrick.doupe@mssm.edu)

CCEP Working Papers from  Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University

Abstract: The clearing of forests for agricultural land and other marketable purposes is a well-trodden path of economic development. With these private benefits from deforestation come external costs: emissions from deforestation currently account for 12 per cent of global carbon emissions. A widespread intervention in reducing emissions from deforestation will affect the paths of agricultural expansion and economic growth of lower income nations. To investigate these processes, this paper presents a general, dynamic, stochastic model of deforestation and economic growth. The model is shown to generate unique deforestation and investment paths and a model without reduced deforestation policy is shown to have a stationary distribution of income and landholdings. There are three main findings. First, in the short run national output growth falls with compensation for reduced deforestation. Second, deforestation rates are reduced through compensating either reduced deforestation directly or the stock of forests; however, compensating the stock of forests is likely to be prohibitively expensive. Finally, by offering a fixed compensation rate, as opposed to a compensation rate tied to a stochastic carbon price, further reductions in deforestation can be achieved.

Keywords: Reduced deforestation; economic growth; climate policy; stochastic stability(search for similar items in EconPapers)
JEL-codes: Q38 Q56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-env and nep-gro
Date: 2014-02
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://ccep.crawford.anu.edu.au/sites/default/fil ... 2014-02/ccep1402.pdf(application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:een:ccepwp:1402

Access Statistics for this paper

More papers in CCEP Working Papers from  Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University Contact information at EDIRC.
Series data maintained by David Stern (david.stern@anu.edu.au).

For further details log on website :
http://econpapers.repec.org/paper/eenccepwp/1402.htm