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Deforestation in the tropics has truly sizable implications for climate change. Forests lock up massive quantities of carbon. Deforestation in Brazil and Indonesia proceeded at rates high enough so that by 2005, these nations were the third and fourth ranking sources of CO 2 emissions, after China and the United States.

Table 13-3 portrays, for the period 1990-2000, patterns of tropical deforestation among the major exporters of tropical hardwoods. It also presents a comparison with the worldwide average for deforestation, with benchmarks for all lower income nations, the U.S and Europe. It is readily apparent that while deforestation has had many causes, deforestation in nations exporting tropical hardwood, whether as logs, sawntimber or plywood, has proceeded at rates several times that of the world as a whole. Deforestation has been especially severe in some tropical nations. By 2010, deforestation in Ivory Coast, Ghana and Thailand had reduced the forest estate to a miniscule proportion of its original extent.

Table 13-3 average annual rates of tropical deforestation major hardwood exporters, plus u.s. and europe 1990-2000
(a) in thousands of sq. km Source: World Bank, World Development Indicators, 2004 (Washington, World Bank, 2005, Table 3.4)
Forest Area (a) in 2000 Average Annual Deforested areas (a) Deforestation annual rate %
Brazil 5,325 22.2 0.4
Cameroon 239 2.2 0.9
Indonesia 1,050 13.1 1.2
Malaysia 193 2.4 1.2
Papua New Guinea 306 1.1 0.4
Philippines 58 0.9 1.4
Thailand 148 1.1 0.7
World-wide 38,480 95.0 0.2
Low-Income 9,031 73.0 0.8
U.S. 2,260 -3.0 -0.2
Europe 846 -2.9 -0.3

Deforestation in the eighties was, if anything, even more severe than during the nineties. Table 13-4 presents deforestation rates for major exporting nations, plus countries such as Honduras, Cote d’Ivoire, which had largely been deforested by 1995. Brazil finally took steps, in recent years, to curb deforestation by expanding the network of protected areas. In 2008, the Brazilian government announced a new set of programs to reduce deforestation rates to 20% of the historical trend by the year 2020. The program will cost between $7 and $18 billion over the next 10 years. Nepstead, et al. “The End of Deforestation in the Brazilian Amazon”, Science , Vol. 326, December 4, 2009.

Table 13-4 deforestation 1981-85 selected exporters of tropical hardwoods
Annual Average Rate of Deforestation
Brazil 0.4
Cameroon 0.4
Cote d’Ivoire 5.9
Honduras 2.4
Indonesia 0.5
Malaysia 1.2
Papua New Guinea 0.1
Philippines 0.7
Thailand 2.4
Source: Robert Repetto and Malcolm Gillis, eds, Public Policy and the Misuse of Forest Resources , (N.Y., Cambridge University Press, 1988).

As Denslow has noted, massive forest destruction in the tropics over the past six decades had an important historical antecedent: the opening of the great eastern deciduous forests of North America in the eighteenth and nineteenth centuries. Denslow, Julie S. (1988). The Tropical Rain Forest Setting. Washington, DC: The Smithsonian Institution. This was accompanied also by high rates of deforestation until the early 20 th century. These temperate zone forests had largely recovered by the 21 st century: the U.S. east of the Mississippi had more forest cover in 2000 than in 1900. But the nature of the soils in tropical forests is such that the prospects for reforestation there are much more limited than in the temperate forests of North America. See Chapter 9 Ashton, Peter and Panayotou, Theodore (1992), Not by Timber Alone , Washington, D.C.: Island Press and Whitmore, T.C. (1984), Tropical Rain Forests of The Far East , Oxford Clarendon. This is largely because the nutrient-holding capacity of the soils of the moist tropics is very low. The above-ground biomass contains over 80% of the nutrients in a tropical forest versus less than 25% in temperate forests. In temperate forests, the forest floor consists primarily of the forest itself: needles, leaves, ground litter from dead trees, mosses, etc. This forms a natural compost for temperate forests; the above-ground biomass contains less than 30% of nutrients in the forest. But when tropical trees are harvested, a very large share of the ecosystem nutrients is permanently removed (even when selective cutting, rather than the less frequently used clear-cutting method is employed for harvest). Significant reforestation in the tropics, should it ever occur, will therefore be very expensive, especially with regard to fertilizer needs, and will require many decades. It is therefore quite clear that tropical forest resources cannot be viewed as inexhaustible, as was the prevailing view until quite recently.

Table 13-6 selected real commodity prices 1970-2008 (in prices of year 2000)
Commodity Inflation Adjusted Prices Percent change over entire period.
1970 2008
Rubber (a) 176 206 +17%
Phosphate Rock (b) 58 272 +368%
Aluminum (b) 1,795 2,027 +13%
Copper (b) 2,690 5,481 +104%
Gold (c) 125 687 +450%
Nickel (b) 8,037 16,635 +106%
Tin (d) 1,273 1,459 +15%
Source, World Bank, World Development Indicators , 2009(Washington, DC: World Bank, 2009)

However, one should be careful to note that if 1980, rather than 1970 were used as a base year, the price of gold actually fell in real terms. The nominal (unadjusted for inflation price of Gold reached $980 per troy ounce in 1980. In mid 2008, the nominal price was only $900. Since inflation over the period 1980-2008 averaged about 2% per year the real price of gold fell significantly during the period, in spite of price spikes after 2007. Copper had gains comparable to tropical logs, while tin and aluminum gains were much lower. We may conclude that primary commodities have consistently been fairly good hedges against inflation, except perhaps over in the very short term (one to two years). Gold was a good hedge over the whole period, but a poor one for the period after 1980.

Iv. conclusion

For tropical hardwoods, the export boom that began after World War II had mixed results for exporting nations. To be sure, very substantial amounts of tropical wood and wood products were exported, primarily to the U.S., Europe, and after 1982, to China. In the process, very large swaths of previously undisturbed tropical forests were deforested. In contrast to North America, these tracts will never be easily reforested. There was some employment growth in the export sector for hardwoods in tropical nations, but by their very natures, modern log harvesting and processing methods are capital-intensive, not labor intensive. Governments did capture significant tax revenues from exports of tropical hardwoods until the 1980’s, when heavily taxed log exports gave way to very lightly taxed or untaxed sawnwood and plywood exports. Repetto, Robert and Gillis, Malcolm (1986). Public Policies and The Misuse of Forest Resources. NY: Cambridge University Press.

Finally, the business of exporting tropical hardwoods – in log and processed form – was one in which the purchasing power of the exported commodities increased significantly over the period under review, especially logs.

Future economic historians will face the task of determining whether the extraction and processing of tropical timber has brought net benefits or net costs to exporting nations, after considering all economic gains (in export earnings, taxes, etc.) against all economic costs (ecological damages, decline in value of non-wood products and services offered by intact tropical forests). The benefits to nations importing tropical hardwood products have been apparent. Growing reliance on tropical hardwood products in building and housing construction has allowed not only cost savings through cheaper construction, but also less pressure on forests in the importing nations.

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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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