Abstract
Ongoing deforestation is a pressing, global environmental issue with direct impacts on climate change, carbon emissions, and biodiversity. There is an intuitive link between economic development and overexploitation of natural resources including forests, but this relationship has proven difficult to establish empirically due to both inadequate data and convoluting geo-climactic factors. In this analysis, we use satellite data on forest cover along national borders in order to study the determinants of deforestation differences across countries. Controlling for trans-border geo-climactic differences, we find that income per capita is the most robust determinant of differences in cross-border forest cover. We show that the marginal effect of per capita income growth on forest cover is strongest at the earliest stages of economic development, and weakens in more advanced economies, presenting some of the strongest evidence to date for the existence of at least half of an environmental Kuznets curve for deforestation.
Highlights
Substantial increases in human activities over the last century have resulted in forest decline, in the tropical areas of the world
Cover differences across pairs of countries which share Homogeneous Response Units (HRU) implies that national borders can be treated as a natural experiment to measure the effect of economic development on forest cover depletion
In order to ensure that the forest cover difference is not driven by small areas, the Cross-Border Deforestation Index (CBDI) is obtained using the maximum area of HRU shared by bordering countries, requiring that a minimum of 500 km[2] of the HRU area is present on each side of the border and that at least one of the two sides of the border contains a minimum forest coverage of 20%
Summary
Cover: Evidence from Satellite Data received: 27 June 2016 accepted: 09 December 2016. There is an intuitive link between economic development and overexploitation of natural resources including forests, but this relationship has proven difficult to establish empirically due to both inadequate data and convoluting geo-climactic factors In this analysis, we use satellite data on forest cover along national borders in order to study the determinants of deforestation differences across countries. The accounting and reporting errors that frequently plague forest statistics further convolute the results of these studies[18] In this analysis, we use a satellite-based dataset of forest cover and the discontinuities created by national borders as a natural experiment to provide evidence on the relationship between economic development and forest cover[19] across national borders worldwide for the year 2005. We perform a series of robustness checks to ensure that the results found are not driven by particular characteristics of our research design
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