Theories on Long- and Short-Run Forest Dynamics - Forest Transition, Environmental Kuznets Curve, Ecologically Unequal Exchange

This blog post is based on Rodriguez García et al. 2021 and this Twitter thread

Many works assess Environmental Kuznets curve for forest; but crucial is to understand mechanisms linking economic development and de/reforestation (governance, changing economies, technologies, displacement..?). We assess this in this study using a co-integration approach on a long-term cross-country panel dataset.

Some insights: Over the long run, there are dynamic equilibrium relationships between forest cover area, economic development, agricultural area and rural population density. In other words, there are feedback mechanisms (to clarify) which, when forest cover tends to drop very low, tend to bring forest cover towards a dynamic equilibrium with these other variables. Does not mean automatic or guaranteed!

Agricultural intensification generally does not significantly influences country-level forest cover trajectories, on net (but links to agricultural area, and can hide crop and region-specific effects – see this article).

For middle-income and pre-forest transition countries, improved governance positively affects forest area when the latter is low, i.e., good governance is key in situations of forest scarcity.

This approach, using cointegration to disentangle long and short run causal effects, and assessment of direct versus indirect effects, can be used for other similar questions (e.g. this article).