Role of demand side incentives in fine grained protection: A case study of Ghana's tropical high forest

Abstract

Ghana is among the countries that has made most recent progress towards sustainable high forest management. This paper examines the role of ‘demand side’ incentives—the forest fees and trade regulations which influence the level of demand for standing timber. The impacts of forest fee levels and log export bans on high-value species, are assessed mainly in terms of their consequences for environmental goals, but also with respect to revenue collection, rent distribution and economic objectives like the stimulation of value-added processing, exports and employment. By observing the impacts of forest fee levels and the log export ban on a range of forest stakeholders, it was found that these ‘incentive’ either tended to underprice the resource and encourage rent seeking behaviour among the resource users, or cause a passive or negative attitude among ‘resident stakeholders’, whose access to the resource is severely limited by law. The log export bans have caused severe distortions on the domestic market encouraging consumption of endangered species and negating the environmental objectives of the bans. Both the low royalties and log export ban have encouraged over-capacity and inefficiency in processing, to add to already high wastage levels in the forest. In general, these demand-side incentives have not prevented market forces causing high-grading of the forest, but have resulted in a massive transfer of resources from the public to the private sector, and been disappointing in terms of the expected economic benefits. The paper touches on the accompanying legal, institutional and regulatory frameworks, which also send out strong incentive signals. Ill-construed incentives, especially those which distort the market, tend to send out weak and contradictory signals. It is concluded that strong supply-side control measures are essential for sustainable forest management from state forests, while demand-side incentives may be viewed as fine tuning conservation measures and for their importance in achieving revenue and distributional objectives.