CONSERVING TROPICAL RAIN FORESTS IN INDONESIA: A QUANTITATIVE ASSESSMENT OF ALTERNATIVE POLICIES

Rainer Thiele

Journal of Agricultural Economics, 1995, vol. 46, issue 2, 187-200

Abstract: The present paper provides a numerical general equilibrium assessment of policies to reduce tropical deforestation in Indonesia. Two groups of policy measures are examined: (i) forestry policies as a means to internalise the local externalities of deforestation; (ii) international measures to address the global dimension of the problem. Given the relatively short rotation periods and the high harvesting intensity in the forestry sector, it is concluded that among the forestry policies an increase in the minimum harvest age is the best solution from an ecological point of view, because it tackles both problems simultaneously. At the global level, import restrictions, for Indonesian wood products are ecologically ineffective and place considerable costs on the Indonesian economy, whereas compensation payments can compensate for the losses of forest conservation, if the money is invested in the creation of new employment opportunities.

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jageco:v:46:y:1995:i:2:p:187-200

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