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Forest Area: Old and New Factors That Affect Its Dynamics

Elisa Toledo (), Wilman Santiago Ochoa-Moreno (), Rafael Alvarado (), Lizeth Cuesta (), Muntasir Murshed () and Abdul Rehman ()
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Elisa Toledo: Department of Economics, Universidad Técnica Particular de Loja, Loja 110150, Ecuador
Wilman Santiago Ochoa-Moreno: Department of Economics, Universidad Técnica Particular de Loja, Loja 110150, Ecuador
Lizeth Cuesta: Carrera de Economía, Universidad Nacional de Loja, Loja 110150, Ecuador
Muntasir Murshed: School of Business and Economics, North South University, Dhaka 1207, Bangladesh

Sustainability, 2022, vol. 14, issue 7, 1-17

Abstract: The analysis of the nexus between environmental degradation and economic progress has focused on polluting emissions. However, the forest area plays a significant role in achieving the Sustainable Development Goals (SDG) related to the environment. Forest area is directly related to air and water quality and the absorption of polluting residues. At the same time, in recent decades, economic progress processes have been internationalised and knowledge has improved in the context of persistent income inequality. The objective of this research is evidence that economic progress is destroying nature; for this, we use forest area as a measure of environmental quality. The nexus between the two variables is moderated by the globalisation KOF index, income inequality, and knowledge. Using non-linear methods, we find a threshold effect in globalisation, inequality, and economic progress. This result implies that before the threshold, the impact of the covariates differs from the impact after the threshold, generating findings different from those shown by the previous environmental literature. The results reveal that after a threshold, the impact of economic progress on forest area is negative. This fact reveals that the main obstacle to achieving environmental sustainability is in the least developed countries, where inequality and globalisation reinforce the degradation of the forest area. We find that knowledge is a mechanism to prevent deforestation, particularly in more developed countries. Those responsible for pro-environmental policy should promote global strategies to prevent economic progress from being based on the destruction of nature.

Keywords: forest area; economic progress; globalisation index; knowledge (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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