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Economic Development and Forest Cover: Evidence from Satellite Data.

Jesús Crespo Cuaresma1,2,3,4, Olha Danylo3, Steffen Fritz3

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Deforestation is a global issue. Higher income per capita reduces forest loss, especially in early development stages, supporting the environmental Kuznets curve theory for forests.

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Area of Science:

  • Environmental Science
  • Environmental Economics
  • Remote Sensing

Background:

  • Deforestation poses significant global environmental challenges, impacting climate change, carbon emissions, and biodiversity.
  • Establishing an empirical link between economic development and forest resource overexploitation is complex due to data limitations and confounding geo-climatic factors.

Purpose of the Study:

  • To empirically investigate the determinants of deforestation differences across countries.
  • To analyze the relationship between economic development and forest cover using cross-border comparisons.

Main Methods:

  • Utilized satellite data to assess forest cover changes along national borders.
  • Controlled for geo-climatic variations across borders to isolate economic effects.

Main Results:

  • Income per capita emerged as the most robust determinant of cross-border differences in forest cover.
  • The impact of per capita income growth on forest cover was strongest during early economic development stages, diminishing in advanced economies.

Conclusions:

  • Findings provide strong evidence for an environmental Kuznets curve in the context of deforestation.
  • Economic development, particularly rising income per capita, plays a crucial role in mitigating deforestation, with effects varying by development stage.