Tropical Deforestation as an International Economic Problem

Abstract

The destruction of the tropical forest ecosystem in general and of rain forests in particular not only impacts on the environment in tropical countries but incurs changes in the world climate by aggravating the greenhouse effect.¹ In addition to having effects on the global climate, rain forest ecosystems feature a variety of unknown biological species. This genetic diversity has been a major research input for natural scientists all over the world.² Hence, the destruction of the tropical forest ecosystem leads to negative ecological effects both in industrialized and in the respective tropical countries. These ecological effects cause negative externalities in tropical and industrialized nations:

• Due to the deforestation of tropical forests, the respective tropical countries face problems like changes in the microclimate, soil erosion and decline of the water endowment. These effects can lead to a decline in agricultural productivity. Moreover, native peoples engaging in economic activities that do not reduce the regenerative capacity of rain forest ecosystems are crowded out given the current speed of deforestation in tropical countries.

• The aggravation of the greenhouse effect is expected to destabilize the global climate and to cause fluctuations in climatic extrema like temperature and wind. At the present, the economic costs of the global warming cannot be quantitatively assessed. However, the resulting increase in the variations of temperature and wind are likely to reduce the productivity in sectors that are highly dependent on climatic conditions, i.e., tourism, transport, agriculture, forestry. Moreover, the expected increase in the sea level may threaten coastal zones, which are likely to be flooded, thus leading to a loss of land or expensive preventive measures (Simonis, v. Weizsäcker, Hauchler and Böll, 1989, pp. 11–13).³

• The extinction of a number of biological species is expected to affect the research input available for the pharmaceutical and chemical industries and the producers of agricultural inputs.⁴

• Finally, the mere existence of environmental goods like tropical forest areas, biological species or beautiful landscapes has a positive value in terms of consumer preferences. Thus, these environmental goods can be treated as ordinary consumer goods, as there is a positive demand for them. As the supply of these environmental goods is permanently declining, the welfare position of consumers all over the world is negatively affected (Pearce and Turner, 1990, p. 265).

The author is gratefully indebted to Joanne C. Burgess for helpful comments and suggestions.