Wednesday 04 May 2022 12:30 - 14:00

This event is both online and in person

SAL 2.04, 2nd Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH

About this event

We study deforestation in a dynamic world trade system. Using a data set on global deforestation, we document that between 1990-2020: (i) forest area has decreased by 7.1 percent at the global level, with large heterogeneity across countries, (ii) deforestation has been markedly associated with expansions of agricultural land use, and (iii) forest carbon intensity differs substantially across the world. We build a model in which structural change and comparative advantage determine the extent, location, and timing of deforestation. We show analytically that, if agriculture is complementary to the rest of the economy, multilateral agricultural liberalization tends to reduce deforestation, while such shocks increase deforestation when experienced by individual economies. In our calibrated model, a permanent 30 percent reduction in global agricultural trade costs leads to a 0.7 percent steady-state increase in global forest area relative to the baseline, taking decades to unfold. Countries that have a comparative advantage in agriculture, however, deforest more to supply agricultural products to the rest of the world.

Participants are expected to adhere to the CEP Events Code of Conduct.

Directions

This event will take place in SAL 2.04, 2nd Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.

International Economics Seminars are part of the CEP's Trade programme.