Economic growth and forest transition in Latin America

Latin America forests in the past decades has finally seen an easing in deforestation rates. This data, although hiding heterogeneous trends, suggests that this region may have embarked on the road to a forest transition (FT). Therefore, this paper empirically investigates the existence of a FT for Latin America through a specific Environmental Kuznets Curve (EKC) perspective. It relies on a panel of 21 countries and on novel satellite source characterized by a long-time coverage (1982-2015), hence particularly suitable to investigate the long-run dynamics between forest cover and economic development. Countries are clustered into two major groups according to the FT stage they are in. Results suggest the existence of a FT for Latin America along its economic development. Countries in early- and pre-transition stages have a U-shape relationship with a turning point at US $ 7,150. Conversely, countries in late- and post-transition stages show an opposite curve, albeit with a far high turning point, suggesting how the relationship after the first turning point will continue to be positive. The paper also conducts the analysis by comparing different forest cover sources showing how results may differ, hence representing a concern for any proper policy intervention. About this issue and the implication of the FT the paper reflects further in the conclusion.

Automated summary

The deforestation rates in Latin America have finally started to decrease in the past decades, suggesting the possibility of a forest transition in the region. This paper investigates the existence of this forest transition through an analysis of the relationship between forest cover and economic development using a panel of 21 countries and satellite data. The results show that there is indeed a forest transition in Latin America, with different stages of countries showing different patterns.