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Forest management and competing land uses: an economic analysis for Costa Rica

by Kishor, N.M; Constantino, L.F.
Series: LATEN Dissemination Note - World Bank (EUA).Publisher: Washington, DC (EUA) 1993Description: 30 p.Subject(s): BOSQUE NATURAL | MANEJO FORESTAL | SOSTENIBILIDAD | UTILIZACION DE LA TIERRA | VALORACION ECONOMICA | INCENTIVOS | DEFORESTACION | DEGRADACION AMBIENTAL | POLITICA FORESTAL | COSTA RICA | SUSTAINABILITY | LAND USE | INCENTIVES | DEFORESTATION | ENVIRONMENTAL DEGRADATION | FORESTRY POLICIES | COSTA RICA | DURABILITE | UTILISATION DES TERRES | INCITATION | DEBOISEMENT | DEGRADATION DE L'ENVIRONNEMENT | POLITIQUE FORESTIERE | COSTA RICA In: Summary: This paper, using site specific data from Costa Rica as an example, tries to explain why sustainable natural forest management, which is a declared goal for governments in the region, is seldom observed with the exception of half a dozen cases of little commercial relevance. Instead, private landowners prefer to mine the forests, convert to cattle ranching, or convert to forest plantations. The main reason is that sustainable natural forest management cannot compete financially with alternative types of land management. The structure of policy incentives prevalent have helped make matters worse. To promote sustainable forest management, which may be economically justifiable under certain conditions and for specific sites, the best policy instruments are likely to be direct incentives for forest management. These will be more effective if offered to small farmers than to corporate owners. Because a large proportion of environmental benefits from forest management accrue to the World, it would not make sense for Costa Rica alone to finance these incentives, and the World should consider sharing in their costs. The paper also calls attention to the importance of discounts rates in explaining land use decisions, a fact widely known but often absent in many of the recent discussions of deforestation. The results indicate that the incentives to deforest increase as the discount rate approaches zero.
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This paper, using site specific data from Costa Rica as an example, tries to explain why sustainable natural forest management, which is a declared goal for governments in the region, is seldom observed with the exception of half a dozen cases of little commercial relevance. Instead, private landowners prefer to mine the forests, convert to cattle ranching, or convert to forest plantations. The main reason is that sustainable natural forest management cannot compete financially with alternative types of land management. The structure of policy incentives prevalent have helped make matters worse. To promote sustainable forest management, which may be economically justifiable under certain conditions and for specific sites, the best policy instruments are likely to be direct incentives for forest management. These will be more effective if offered to small farmers than to corporate owners. Because a large proportion of environmental benefits from forest management accrue to the World, it would not make sense for Costa Rica alone to finance these incentives, and the World should consider sharing in their costs. The paper also calls attention to the importance of discounts rates in explaining land use decisions, a fact widely known but often absent in many of the recent discussions of deforestation. The results indicate that the incentives to deforest increase as the discount rate approaches zero.

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