Deforestation and Government Conservation Policies

Luca Di Corato (), Michele Moretto and Sergio Vergalli

Review of Environment, Energy and Economics - Re3, 2013

Abstract: In this paper we investigate land conversion in the presence of voluntary and mandatory habitat conservation policies. Conversion decisions are taken under uncertainty about the value of environmental services by a multitude of landholders competing on the market for agricultural products. We show that land conversion can be delayed by compensating landholders providing environmental services and by limiting the individual extent of developable land. In contrast, we find that setting a ceiling on aggregate land conversion may lead to runs which rapidly exhaust the targeted amount of land. Finally, studying conversion dynamics under different policy scenarios, we show that uncertainty, even if inducing conversion postponement in the short-run, increases the average rate of deforestation and reduces the expected time for total conversion in the long run.

Keywords: Optimal stopping; Deforestation; Payments for environmental services; Natural resources management (search for similar items in EconPapers)
JEL-codes: C61 D81 Q24 Q58 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femre3:2013.07-01

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