Macroeconomic Policy Framework for Reducing Deforestation: A Sri Lankan Case Study
White, Robin G.
- Submitted in partial fulfillment of the degree Master of Arts in Law and Diplomacy at the Fletcher School of Law and Diplomacy. Abstract: Using a case study on Sri Lanka and comparing findings to literature on Bolivia and Cameroon, this thesis explores the linkages between economy-wide policies (both macroeconomic and sectoral policies) and deforestation in order to determine the macroeconomic pol... read moreicy framework conducive to limiting deforestation. For Sri Lanka, the case study explores the impact of agriculture subsidies, trade and government-sponsored irrigation schemes on deforestation arising from chena (slash-and-burn agriculture), rice cultivation, illicit felling, smallholder tea, cardamom cultivation and prawn farming. Agricultural subsidies have had little impact on forest loss because access to subsidies has been restricted or because labor or land constraints have prevented expansion of farms. Trade protection appears to have favored deforestation through increased cultivation of chena crops in particular regions, depending on the availability of alternative lifestyles. Domestic plantation supplies of timber, logging bans and monitoring of transported wood have discouraged illicit felling. Tea export duties have not directly impacted deforestation from tea smallholders. Corruption has played a key role in facilitating the clearing of mangroves for prawn-farming. Explicit government promotion of irrigation schemes has been the main government policy directly linked to deforestation. However, by enabling more intensive land-use, irrigation may have reduced future deforestation from chena in light of increasing population pressures and growing demand for agricultural land. The primary macroeconomic policy driver for deforestation in Bolivia has been government-sponsored settlement schemes for soybean cultivation. Long-term deforestation pressures remain high due to the unsustainability of soybean cultivation and the government's failure to take concrete measures to alleviate rural poverty. A lack of environmental planning and private market restrictions have also led to deforestation loss from logging. In Cameroon, deforestation has been driven by the introduction and sudden removal of coffee and cocoa subsidies, which have led to the expansion of coffee and cocoa plantations or abandonment of plantations in favor of increased slash-and-burn agriculture. Lack of fiscal restraint and insufficient policies promoting economic diversification created conditions that necessitated abrupt removal of agricultural subsidies and liberalization of coffee and cocoa marketing. A comparison of the findings from Sri Lanka, Bolivia and Cameroon demonstrates that a macroeconomic policy framework amenable to forest conservation needs to include explicit incorporation of environmental considerations in government-wide policy-making, be based on the long term, be focused on small-scale development targeted at disadvantaged groups, account for differing temporal and regional considerations, involve diversification, include private market restrictions and be supported by environmentally-friendly economic interventions by the international community.read less