Economics of Deforestation

Tropical forests are disappearing, giving way to alternative land uses. Sven Wunder gives an economic perspective on deforestation. Following a survey of different deforestation definitions, theories and empirical evidence, a case study of Ecuador provides an historical picture of factors affecting forest loss throughout different periods, regions and ecosystems. It is shown that policy and market failures alone cannot explain why rapid deforestation decision makers follow a composite economic rationale in their continuous clearing of forests which can only be counteracted by concerted action.