The Economics of Tropical Deforestation

Clare A. Balboni, Aaron Berman, Robin Burgess and Benjamin Olken

No 31410, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Two factors have elevated recent academic and policy interest in tropical deforestation: first, the realization that it is a major contributor to climate change; and second, a revolution in satellite-based measurement that has revealed that it is proceeding at a rapid rate. We begin by reviewing the methodological advances that have enabled measurement of forest loss at a fine spatial resolution across the globe. We then develop a simple benchmark model of deforestation based on classic models of natural resource extraction. Extending this approach to incorporate features that characterize deforestation in developing countries---pressure for land use change, significant local and global externalities, weak property rights, and political economy constraints---provides us with a framework for reviewing the fast-growing empirical literature on the economics of deforestation in the tropics. This combination of theory and empirics provides insights not only into the economic drivers and impacts of tropical deforestation but also into policies that may affect its progression. We conclude by identifying areas where more work is needed in this important body of research.

JEL-codes: O13 Q23 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-agr and nep-env
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Citations: View citations in EconPapers (3)

Published as Clare Balboni & Aaron Berman & Robin Burgess & Benjamin A. Olken, 2023. "The Economics of Tropical Deforestation," Annual Review of Economics, vol 15(1), pages 723-754.

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