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Economic and Environmental Benefits of Eliminating Log Export Bans – The Case of Costa Rica

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  • Nalin Kishor
  • Muthukumara Mani
  • Luis Constantino

Abstract

An increasing number of tropical timber‐producing nations have enacted bans on export of logs arguing that this will reduce deforestation, expand downstream wood processing and improve the scale efficiency of domestic processing, create jobs and retain more value‐added nationally. The theoretical literature is clear that trade restrictions are generally welfare reducing (except in special cases such as when there is a potential for an optimal export tax). At best, a log export ban is a second‐best policy tool for reducing deforestation and addressing the associated environmental externalities. In overall terms, the suggestion that log export bans can achieve the objectives expected of them is dubious. However, very little quantitative evidence exists to demonstrate this claim and the paper attempts to address this gap by looking at the economic and environmental impacts of eliminating a log export ban in Costa Rica. The authors argue that eliminating the export ban is Pareto improving and could generate economic gains as high as $14 million per annum with the possibility of relatively modest environmental benefits.

Suggested Citation

  • Nalin Kishor & Muthukumara Mani & Luis Constantino, 2004. "Economic and Environmental Benefits of Eliminating Log Export Bans – The Case of Costa Rica," The World Economy, Wiley Blackwell, vol. 27(4), pages 609-624, April.
    • Handle: RePEc:bla:worlde:v:27:y:2004:i:4:p:609-624
    DOI: 10.1111/j.0378-5920.2004.00616.x
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    References listed on IDEAS

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    Cited by:

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    4. Budy Resosudarmo & Arief Anshory Yusuf & Ditya A. Nurdianto, 2012. "Preliminary Analysis of REDD on Indonesian's Economy," Working Papers in Economics and Development Studies (WoPEDS) 201204, Department of Economics, Padjadjaran University, revised Dec 2012.
    5. Jacob R. Fooks & Steven J. Dundas & Titus O. Awokuse, 2013. "Are There Efficiency Gains from the Removal of Natural Resource Export Restrictions? Evidence from British Columbia," The World Economy, Wiley Blackwell, vol. 36(8), pages 1098-1114, August.
    6. Amoah, M. & Becker, G. & Nutto, L., 2009. "Effects of log export ban policy and dynamics of global tropical wood markets on the growth of timber industry in Ghana," Journal of Forest Economics, Elsevier, vol. 15(3), pages 167-185, August.
    7. Budy P. Resosudarmo & Arief Anshory Yusuf, 2006. "Is the Log Export Ban Effective? Revisiting the Issue through the Case of Indonesia," Economics and Environment Network Working Papers 0602, Australian National University, Economics and Environment Network.

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