REDD and forest transition: Tunneling through the environmental Kuznets curve

Abstract

International attention is focused on finding ways to reduce emissions from deforestation because of the emerging concerns over climate change. However the causes of deforestation are rooted in current economic and development paradigms. The causes of deforestation also vary across different geographical regions and have implications for the forest transition. Attempts to reach an international agreement on curbing deforestation have achieved little success despite over 30years of UN negotiations. New initiatives from REDD (Reducing Emissions from Deforestation and forest Degradation) could provide financial incentives to curb deforestation. Hence, alternative development paths for forest cover changes and forest transition are analyzed for the REDD policy within the framework of an environmental Kuznets curve (EKC) for deforestation. The EKC models are estimated for geographical regions of Latin America, Africa and Asia. The results based on the panel data analysis of 43 countries, covering the period 1970–1994, provides evidence that an inverted U-shaped EKC fits for Latin America and Africa, while a U-shaped EKC applies to Asia. The results also indicate that strengthening agricultural and forestry sector policies are important for curbing deforestation. The EKC models' estimates could provide guidance for decisions on financing the REDD policy as specific to each region.