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Deforestation and optimal management

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  • Piazza, Adriana
  • Roy, Santanu

Abstract

In a general discrete time model of optimal forest management where land may be diverted to alternative use and stocks of standing trees may yield flow benefits, we investigate the economic and ecological conditions under which optimal paths lead to (total) deforestation i.e., complete long term removal of forest cover. We show that if deforestation occurs from some initial state, then it must occur in finite time along every optimal path so that zero forest cover is the globally stable optimal steady state. We develop a condition that is both necessary and sufficient for deforestation. Deforestation is less likely if the immediate profitability of timber harvest, the benefits from stocks of standing forests and the timber content of trees are higher. We characterize the minimum forest cover along optimal paths (when deforestation is not optimal). We design a simple linear subsidy on standing forest biomass that can motivate a private owner (who does not take into account the external benefits from standing trees) to conserve forests.

Suggested Citation

  • Piazza, Adriana & Roy, Santanu, 2015. "Deforestation and optimal management," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 15-27.
    • Handle: RePEc:eee:dyncon:v:53:y:2015:i:c:p:15-27
    DOI: 10.1016/j.jedc.2015.01.004
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    Cited by:

    1. Tahvonen, Olli & Rautiainen, Aapo, 2017. "Economics of forest carbon storage and the additionality principle," Resource and Energy Economics, Elsevier, vol. 50(C), pages 124-134.
    2. Chenavaz, Régis Y. & Leocata, Marta & Ogonowska, Malgorzata & Torre, Dominique, 2022. "Sustainable tourism," Journal of Economic Dynamics and Control, Elsevier, vol. 143(C).
    3. Adriana Piazza & Santanu Roy, 2020. "Irreversibility and the economics of forest conservation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(3), pages 667-711, April.
    4. Silvia Faggian & Giuseppe Freni, 2015. "A Ricardian Model of Forestry," Working Papers 2015:12, Department of Economics, University of Venice "Ca' Foscari", revised 2015.
    5. Laukkanen, Matti & Tahvonen, Olli, 2023. "Wood product differentiation in age-structured forestry," Resource and Energy Economics, Elsevier, vol. 73(C).
    6. Daniel Bouchardet & Alexandre Porsse, 2015. "An Exploratory Spatial Data Analysis for Deforestation in Brazilian Amazon," ERSA conference papers ersa15p845, European Regional Science Association.
    7. Kuusela, Olli-Pekka & Lintunen, Jussi, 2020. "Modeling market-level effects of disturbance risks in age structured forests," Forest Policy and Economics, Elsevier, vol. 118(C).
    8. Khan, M. Ali, 2016. "On a forest as a commodity and on commodification in the discipline of forestry," Forest Policy and Economics, Elsevier, vol. 72(C), pages 7-17.

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    More about this item

    Keywords

    Deforestation; Optimal forest management; Conservation; Renewable resources; Extinction;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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