Economic And Environmental Benefits Of Eliminating Log Export Bans

An increasing number of tropical timber producing nations have enacted bans on export of logs. Proponents argue that a log export ban is a second-best policy tool for addressing environmental externalities; it also creates more jobs and improves scale efficiencies domestically. Theoretical arguments suggest that log export bans are largely incapable of achieving their objectives. However, little quantitative evidence exists. The authors maintain that eliminating log export bans in Costa Rica could generate economic gains as high as $14 million annually in addition to the environmental benefits.

An increasing number of tropical timber-producing nations have enacted bans on export of logs arguing that this will reduce deforestation, expand downstream wood processing and improve the scale efficiency of domestic processing, create jobs and retain more value-added nationally. The theoretical literature is clear that trade restrictions are generally welfare reducing (except in special cases such as when there is a potential for an optimal export tax). At best, a log export ban is a second-best policy tool for reducing deforestation and addressing the associated environmental externalities. In overall terms, the suggestion that log export bans can achieve the objectives expected of them is dubious. However, very little quantitative evidence exists to demonstrate this claim and the paper attempts to address this gap by looking at the economic and environmental impacts of eliminating a log export ban in Costa Rica. The authors argue that eliminating the export ban is Pareto improving and could generate economic gains as high as $14 million per annum with the possibility of relatively modest environmental benefits.

In response to a new federal law, the Washington State Department of Natural Resources was required to restrict the export of unprocessed logs from state owned lands effective January 1 , 1991. Exported logs receive a greater price than domestically processed logs because of differences in quality, costs, and imperfect markets caused by regulation. A hedonic price approach is used to estimate implicit prices of timber sales characteristics, as well as supply and demand changes, and export restrictions. It is shown that the Forest Resources Conservation and Shortage Relief Act affects the price received in both domestic and export markets. Ceteris paribus, domestic timber prices decline, consistent with increased supply from the restrictions, and export prices increase, consistent with reduced availability. Both grade and species are significant factors in export price premiums. Export price premiums exist, even during a time when environmental concerns have resulted in drastic reductions in domestic timber supplies.

This Review of Good Practices is published as a companion volume to the OECD Policy Framework for Investment and provides analytical background material on each of the ten chapters of the Framework.

International Investment Perspectives is an annual report from the OECD on international investment developments. The focus of the 2005 edition is on policies affecting the investment climate.

In response to a congressional request, GAO: (1) reviewed the potential impacts of tighter Forest Service log export restrictions in the Western United States; and (2) determined the volume and potential impacts of banning third-party substitution. GAO found that, according to the Service, the acquisition of national forest timber from authorized purchasers by firms which were ineligible for direct timber purchases approximated 2 percent of all national forest timber harvested in the western United States. GAO also found that, if the Service banned third-party substitution: (1) some companies could acquire national forest timber at lower prices because of decreased demand and competition, and the lower prices would result in less government revenues; and (2) the ban could disrupt traditional log markets and business practices and force some companies to change their operations or go out of business. In addition GAO found that: (1) the Service reported that it could not enforce a ban on this practice without additional authority and staff; and (2) about 100 million board feet of national forest timber is used as replacement for private timber exported annually, but a GAO review of timber sales contract files for three national forests in Idaho did not disclose that any timber substitution occurred in those forests.

Proceedings of the OECD Workshop on Environmentally Harmful Subsidies, November 2002. For the first time, experts from a variety of backgrounds had the opportunity to take stock of and share technical knowledge of subsidies and their impacts.

This book analyzes the wide range of issues that should be taken into account in forest-related legislation. It stresses that forest law must be understood in the context of the broader legal framework governing land use and land tenure, as well as international obligations related to trade, environmental protection, and human rights. The book also pays significant attention to institutional arrangements and governance practices relevant to forests, including decentralization, transparency, and law enforcement. The authors draw extensively on experience from around the world to provide tools for dealing with various forest management challlenges. The authors are experts in the field of forest law. Lawrence C. Christy is a Former Chief, Development Law Service, Legal Office, Food and Agricultre Organization of the United Nations (FAO). Charles E. Di Leva is Chief Counsel, Environmentally and Socially Sustainable Development and International Law Unit (LEGEN), Legal Vice-Presidency, World Bank. Jonathan M. Lindsay is Senior Counsel with LEGEN, Legal Vice-Presidency, World Bank. Patrice Talla Takoukam is Counsel with LEGEN, Legal Vice-Presidency, World Bank.

In 2000 the European Union and its 78 African-Caribbean-Pacific partners signed the Cotonou Agreement, heralding a new era in developmental politics. This comprehensive book draws attention to the limitations in the EU's approach to implementing pro-poor, environmentally sustainable development amongst its African-Caribbean-Pacific partners.