CEP/LSE International Economics Seminars
Deforestation: A Global and Dynamic Perspective
Sebastian Sotelo (University of Michigan), joint with Farid Farrokhi, Elliot Kang, and Heitor Pellegrina
Wednesday 04 May 2022 12:30 - 14:00
This event is both online and in person32L 2.04, 2nd Floor Conference Room, 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.
This event will take place in 32L 2.04, 2nd Floor Conference Room, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.The building is labelled 32L on the map. Enter the building via Lincoln's Inn Fields.
International Economics Seminars are part of the CEP's Trade programme.