Deforestation and forest-induced carbon dioxide emissions in tropical countries: How do governance and trade openness affect the forest-income relationship

The objective of this article is to study the implications of changes in land use induced by economic growth, economy-wide policies, and governance on defor-estation and forest-induced atmospheric carbon dioxide emissions. Economic growth, democracy, and trade policy explain an important share of the varia-tion in two key determinants of deforestation: agricultural expansion and road building. The resulting shape of the Environmental Kuznets Curve for forests is influenced by governance as well as trade openness. Trade shifts the forest-income curve up (down) for countries that have a comparative disadvantage (advantage) in the production of crops encroaching on forest areas, such as Brazil and the Philippines (Indonesia and Malaysia). Amore democratic coun-try will have a farther turning point than a less democratic country, but whether the Environmental Kuznets Curve shifts up or down is country specific