Deforestation and the carbon sink role of forests: theoretical, empirical, and policy perspectives



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Texas Tech University


This study focuses on the issue of deforestation m tropical and temperate forests and analyzes its implications on the environment, with particular emphasis on climate change and carbon sink concerns. This study aims to stress the economic value and benefits of timber and non-timber products of forests and to determine the economic impact of deforestation versus conservation of forests. An attempt is made to determine the economic benefits and costs of deforestation and the option value of afforestation/reforestation as a means of maintaining the carbon sink value of forests.

The research consists of three essays all dealing with the aspect of deforestation and the role of the forest as a carbon sink. The first essay is a theoretical study that modifies a dynamic optimal control model (initially developed by Brazee and Southgate, 1992) to incorporate the non-timber and carbon sink value of forests and discusses the theoretical implications and qualitative results in comparative static form. The modified model is expected to be used as a framework to analyze how deforestation and forest management influence the role of the forest as a carbon sink and a source of non-timber products. The important policy variables include forest fees, royalties and tax policy in capturing rents, license fees, logging regulations, tax credits, carbon tax, stumpage fees and taxes, interest rates, selective logging system, private forest management and reforestation or replanting deposit and subsidies.