ECONOMIC GROWTH AND THE FOREST DEVELOPMENT PATH : A RE-ASSESSMENT OF THE ENVIRONMENTAL KUZNETS CURVE FOR DEFORESTATION

Abstract

This research attempts to answer to one of the unresolved questions in forestry economics according to Hyde (2014), the possible existence of an Environmental Kuznets Curve for deforestation. It will be shown how this curve could be re-conciliated with the famous Forest Transition hypothesis of Mather (1992) and even with the competing land use model à la von Thünen of the Forest Development Path proposed by Hyde (2012). The investigation is conducted by means of a cross-country analysis for 114 countries. Forest cover data has been specifically reconstructed based on the last Forest Resource Assessment of FAO (2015). Countries have been clustered into low, middle, and high income economies and panel data techniques, both statics and dynamics, have been implemented. Results conclude for a U-shape curve for low and high income (in this group for reforestation) while a reverse U-shape for middle income economies. However, despite the functional form is preserved among the three groups, turning points change according to model specifications.