Trends in tropical forest loss and the social value of emission reductions

Understanding the drivers of forest losses and their economic implications is key to designing efficient climate policies. This study simulates market-driven land-use decisions to identify the factors contributing to forest losses, revealing such losses, their trends, temporal variation and social value. Reducing global forest losses is essential to mitigate climate change and its associated social costs. Multiple market and non-market factors can enhance or reduce forest loss. Here, to understand the role of non-market factors (for example, policies, climate anomalies or conflicts), we can compare observed trends to a reference (expected) scenario that excludes non-market factors. We define an expected scenario by simulating land-use decisions solely driven by market prices, productivities and presumably plausible decision-making. The land-use allocation model considers economic profits and uncertainties as incentives for forest conversion. We compare reference forest losses in Brazil, the Democratic Republic of Congo and Indonesia (2000-2019) with observed forest losses and assign differences from non-market factors. Our results suggest that non-market factors temporarily lead to lower-than-expected forest losses summing to 11.1 million hectares, but also to phases with higher-than-expected forest losses of 11.3 million hectares. Phases with lower-than-expected forest losses occurred earlier than those with higher-than-expected forest losses. The damages avoided by delaying emissions that would otherwise have occurred represent a social value of US$61.6 billion (as of the year 2000). This result shows the economic importance of forest conservation efforts in the tropics, even if reduced forest loss might be temporary and reverse over time.

Automated summary

Understanding the factors contributing to forest losses is important for climate policies. This study simulates land-use decisions driven by market forces and identifies the trends, temporal variation, and social value of forest losses. Reducing global forest losses is essential for mitigating climate change.