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Cooperation for sustainable forest management: An empirical differential game approach

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  • Andrés-Domenech, Pablo
  • Martín-Herrán, Guiomar
  • Zaccour, Georges

Abstract

We model the role of the world's forests as a major carbon sink and consider the impact that forest depletion has on the accumulation of CO2 in the atmosphere. Two types of agents are considered: forest owners who exploit the forest and draw economic revenues in the form of timber and agricultural use of deforested land; and a non-forest-owner group who pollutes and suffers the negative externality of having a decreasing forest stock. We retrieve the cooperative solution for this game and show the cases in which cooperation enables a partial reduction in the negative externality. We analyze when it is jointly profitable to abate emissions, when it is profitable to reduce net deforestation, and when it is optimal to do both (abate and reduce net deforestation). Assuming that the players adopt the Nash bargaining solution to share the total dividend of cooperation, we determine the total amount that the non-forest owners have to transfer to forest owners. Next, we define a time-consistent payment schedule that allocates over time the total transfer.

Suggested Citation

  • Andrés-Domenech, Pablo & Martín-Herrán, Guiomar & Zaccour, Georges, 2015. "Cooperation for sustainable forest management: An empirical differential game approach," Ecological Economics, Elsevier, vol. 117(C), pages 118-128.
    • Handle: RePEc:eee:ecolec:v:117:y:2015:i:c:p:118-128
    DOI: 10.1016/j.ecolecon.2015.06.016
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    References listed on IDEAS

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    1. Wolfersberger, Julien & Amacher, Gregory S. & Delacote, Philippe & Dragicevic, Arnaud, 2022. "The dynamics of deforestation and reforestation in a developing economy," Environment and Development Economics, Cambridge University Press, vol. 27(3), pages 272-293, June.
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    6. Masoudi, Nahid & Zaccour, Georges, 2013. "A differential game of international pollution control with evolving environmental costs," Environment and Development Economics, Cambridge University Press, vol. 18(6), pages 680-700, December.
    7. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
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    9. Daan van Soest & Robert Lensink, 2000. "Foreign Transfers and Tropical Deforestation: What Terms of Conditionality?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 389-399.
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    Cited by:

    1. Sheng, Jichuan, 2020. "Private sector participation and incentive coordination of actors in REDD+," Forest Policy and Economics, Elsevier, vol. 118(C).
    2. Voss, Achim & Schopf, Mark, 2021. "Lobbying over exhaustible-resource extraction," European Economic Review, Elsevier, vol. 135(C).
    3. Chady Jabbour & Anis Hoayek & Jean-Michel Salles, 2022. "Formalizing a Two-Step Decision-Making Process in Land Use: Evidence from Controlling Forest Clearcutting Using Spatial Information," Land, MDPI, vol. 12(1), pages 1-17, December.

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