Quantifying the direct social and governmental costs of illegal logging in the Bolivian, Brazilian, and Peruvian Amazon

Abstract

Illegal logging is a major threat to the long-term sustainability of the forest resources of much of the Amazon Basin. This threat affects the ability of companies to manage viable forest production and distorts the way in which governments are able to implement forest management regulations at all levels. However, quantitative information about the direct impacts of illegal logging is scarce. We evaluate some of the most relevant impacts of illegal logging to government and society in the Bolivian, Brazilian and Peruvian Amazon. The impacts evaluated are loss of government royalties, missed appropriation of revenues, inefficiency in logging operations, loss of productivity and unemployment. The direct costs of illegal logging in the three countries are estimated at between US$558 to 639 million per year. Unemployment due to Illegal logging, defined as the difference between the employment required for legal and illegal logging, is estimated at 1.2 million person-days per year. The magnitude of these impacts justifies additional investment in control and monitoring mechanisms. Costs of illegal logging would be considerably higher if other impacts and illegal forest activities were quantified.