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Forest Degradation and Economic Growth in Nepal, 2003–2010

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  • Jean-Marie Baland
  • François Libois
  • Dilip Mookherjee

Abstract

We investigate the relation between economic growth, household firewood collection, and forest conditions in Nepal between 2003 and 2010. Comovements in these are examined at the household and village levels, combining satellite imagery and household (Nepal Living Standard Measurement Survey) data. Projections of the impact of economic growth based on Engel curves turn out to be highly inaccurate: forest conditions remained stable despite considerable growth in household consumption and income. Firewood collections at the village level remained stable, as effects of demographic growth were offset by substantial reductions in per household collections. Households substituted firewood by alternative energy sources, particularly when livestock and farm-based occupations declined in importance. Engel curve specifications which include household productive assets (a proxy for occupational patterns) provide more accurate predictions. Hence structural changes accompanying economic growth play an important role in offsetting adverse environmental consequences of growth.

Suggested Citation

  • Jean-Marie Baland & François Libois & Dilip Mookherjee, 2018. "Forest Degradation and Economic Growth in Nepal, 2003–2010," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 401-439.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/695690
    DOI: 10.1086/695690
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    2. Novice Patrick Bakehe, 2020. "L'accès à l’électricité: une solution pour réduire la déforestation en Afrique?," African Development Review, African Development Bank, vol. 32(3), pages 338-348, September.
    3. Bošković, Branko & Chakravorty, Ujjayant & Pelli, Martino & Risch, Anna, 2023. "The effect of forest access on the market for fuelwood in India," Journal of Development Economics, Elsevier, vol. 160(C).
    4. Ngawang Dendup, 2021. "Returns to Grid Electricity on Firewood Consumption and Mechanism," Working Papers 2109, Waseda University, Faculty of Political Science and Economics.
    5. Jung, Suhyun & Rogers, Martha, 2024. "Mobile phone adoption, deforestation, and agricultural land use in Uganda," World Development, Elsevier, vol. 179(C).
    6. Boskovic, Branko & Chakravorty, Ujjayant & Pelli, Martino & Risch, Anna, 2018. "The Effect of Forest Access on the Market for Fuelwood in India," TSE Working Papers 18-925, Toulouse School of Economics (TSE).
    7. Leone, Marinella, 2019. "Women as decision makers in community forest management: Evidence from Nepal," Journal of Development Economics, Elsevier, vol. 138(C), pages 180-191.
    8. Bharadwaj, Bishal & Subedi, Mukti Nath & Malakar, Yuwan & Ashworth, Peta, 2023. "Low-capacity decentralized electricity systems limit the adoption of electronic appliances in rural Nepal," Energy Policy, Elsevier, vol. 177(C).
    9. Fercovic, Juan & Foster, William & Gulati, Sumeet, 2024. "Slow burn: Weak energy transition in a growing economy," Energy Economics, Elsevier, vol. 136(C).
    10. Aldashev, Gani & Vallino, Elena, 2019. "The dilemma of NGOs and participatory conservation," World Development, Elsevier, vol. 123(C), pages 1-1.
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