Trade Liberalisation and Global-scale Forest Transition

Rafael González-Val and Fernando Pueyo

No 156843, Climate Change and Sustainable Development from Fondazione Eni Enrico Mattei (FEEM)

Abstract: In this paper, we develop a theoretical model that provides an additional explanation for the forest transition based on a trade liberalisation scenario. Furthermore, in contrast with most explanations, in which the forest transition can only take place at a local level at the expense of other areas, ours is capable of supporting such phenomenon at a worldwide level. We introduce a renewable natural resource (wood), used as an input by manufacturing firms, in a framework with economic geography foundations: transport costs affect the distribution of firms between countries. In a general equilibrium, the results reproduce the forest transition at a global scale: a decrease in transport costs (in particular, that of the natural resource) has a negative effect on the worldwide stock of the natural resource in the short-term; however, this effect is offset during the transition as a consequence of industrial reallocation between countries and eventually disappears in the long-run.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 33
Date: 2013-07
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https://ageconsearch.umn.edu/record/156843/files/NDL2013-070.pdf (application/pdf)

Related works:
Working Paper: Trade Liberalisation and Global-scale Forest Transition (2013)
Working Paper: Trade liberalisation and global-scale forest transition (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemcl:156843

DOI: 10.22004/ag.econ.156843

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