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The effects of government spending on deforestation due to agricultural land expansion and CO2 related emissions

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  • Galinato, Gregmar I.
  • Galinato, Suzette P.

Abstract

This paper examines the effect of changes in government spending level and composition on deforestation due to agricultural land expansion and related carbon dioxide emissions. Our theoretical model shows an unintended consequence from increased government spending and widening social safety nets in developing countries where agricultural land expansion significantly affects forest cover: there is an increase in deforestation and carbon dioxide emissions from land use change. Our empirical tests show that an increase in total government spending significantly increases forest land clearing for agricultural production in the short run leading to more carbon dioxide emissions. However, there is no long-run statistically significant effect on the steady-state forest cover and carbon dioxide emissions.

Suggested Citation

  • Galinato, Gregmar I. & Galinato, Suzette P., 2016. "The effects of government spending on deforestation due to agricultural land expansion and CO2 related emissions," Ecological Economics, Elsevier, vol. 122(C), pages 43-53.
    • Handle: RePEc:eee:ecolec:v:122:y:2016:i:c:p:43-53
    DOI: 10.1016/j.ecolecon.2015.10.025
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    More about this item

    Keywords

    Deforestation; Government spending; Carbon dioxide; Public expenditure;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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