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Effects of Poverty on Deforestation: distinguishing behavior from location

Alexander Pfaff, Suzi Kerr, Romina Cavatassi, Benjamin Davis, Leslie Lipper, G. Arturo Sanchez-Azofeifa, J. Timmins
Economics of poverty, environment and natural resource use (chapter 6).

PDF link iconWe review many theoretical predictions that link poverty to deforestation and then examine poverty’s net impact empirically using multiple observations of all of Costa Rica after 1960. Countrywide disaggregate (district-level) data facilitate analysis of both poverty’s location and its impact on forest. If the characteristics of the places the poor live are not controlled for, then poverty’s impact is confounded with differences between poorer and less poor areas and we find no significant effect of poverty. Using our data over space and time to control for effects of locations’ differing characteristics, we find that the poorer are on land whose relative quality discourages forest clearing, such that with these controls the poorer areas are cleared more. The latter result suggests that poverty reduction aids the forest. For the poorest areas, this result is weaker but another effect is found: deforestation responds less to productivity, i.e., the poorest have less ability to expand or to reduce given land quality.

 

Will buying tropical forest carbon benefit the poor? evidence from Costa Rica

Alexander Pfaff, Suzi Kerr, Leslie Lipper, Romina Cavatassi, Benjamin Davis, Joanna Hendy, G. Arturo Sanchez-Azofeifa
Land Use Policy 24 (2007) 600–610

PDF link iconWe review claims linking both payments for carbon and poverty to deforestation. We examine these effects empirically for Costa Rica during the late 20th century using an econometric approach that addresses the irreversibilities in deforestation. We find significant effects of the relative returns to forest on deforestation rates. Thus, carbon payments would induce  conservation and also carbon sequestration, and if land users were poor could conserve forest while addressing rural poverty. We note that the poor appear to be marginalized in the sense of living where land profitability is lower. Those areas also have more forest. We find that poorer areas may have a higher supply response to payments, but even without this effect poor areas might be included and benefit more due to higher (per capita) forest area. They might be included less due to transactions costs, though. Unless the Clean Development Mechanism of the Kyoto Protocol is modified in its implementation to allow credits from avoided  deforestation, such benefits are likely to be limited.