Trade Liberalisation and Global-scale Forest Transition

Rafael González-Val and Fernando Pueyo

No 2013.70, Working Papers from Fondazione Eni Enrico Mattei

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: Forest Transition; Natural Resources; Industrial Location; Trade Liberalisation (search for similar items in EconPapers)
JEL-codes: F18 Q20 Q23 R12 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-env and nep-res
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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:fem:femwpa:2013.70

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