Forest degradation and economic growth in Nepal, 2003–2010
Files
Accepted manuscript
Date
2018-04
DOI
Authors
Baland, Jean-Marie
Libois, François
Mookherjee, Dilip
Version
Accepted manuscript
OA Version
Citation
Jean-Marie Baland, François Libois, Dilip Mookherjee. 2018. "Forest Degradation and Economic Growth in Nepal, 2003–2010." Journal of the Association of Environmental and Resource Economists, Volume 5, Issue 2, pp. 401 - 439. https://doi.org/10.1086/695690
Abstract
We investigate the relation between economic growth, household firewood collection, and forest conditions in Nepal between 2003 and 2010. Comovements in these are examined at the household and village levels, combining satellite imagery and household (Nepal Living Standard Measurement Survey) data. Projections of the impact of economic growth based on Engel curves turn out to be highly inaccurate: forest conditions remained stable despite considerable growth in household consumption and income. Firewood collections at the village level remained stable, as effects of demographic growth were offset by substantial reductions in per household collections. Households substituted firewood by alternative energy sources, particularly when livestock and farm-based occupations declined in importance. Engel curve specifications which include household productive assets (a proxy for occupational patterns) provide more accurate predictions. Hence structural changes accompanying economic growth play an important role in offsetting adverse environmental consequences of growth.