Global Environmental Policy Seminar
Deforestation: A Global and Dynamic Perspective
We study deforestation in a dynamic world trade system. We first document that between 1990-2020: (i) global forest area has decreased by 7.1 percent, with large heterogeneity across countries, (ii) deforestation is associated with expansions of agricultural land use, (iii) deforestation is larger in countries with a comparative advantage in agriculture, and (iv) larger population growth leads to deforestation. We build a model in which structural change and comparative advantage determine the extent, location, and timing of deforestation. We show analytically and quantitatively that, if agriculture is complementary in demand to other sectors, global reductions in trade costs reduce global deforestation, even if such shocks increase deforestation when experienced only by an individual economy. In our calibrated model, a 30 percent reduction in global agricultural trade costs increases steady-state forest share for world area by 0.5 percentage points, taking decades to occur. In the cross-section, countries with a comparative advantage in agriculture expand production at the expense of more deforestation there.

Biography:
Heitor S. Pellegrina is an assistant professor at University of Notre Dame. He received undergraduate degrees in Economics from the University of São Paulo and a PhD from Brown University in 2017. His research area is trade and development, with a particular emphasis on agricultural markets and natural resources. His research has been published in the Journal of Political Economy, Journal of Development Economics, and Journal of International Economics. At Notre Dame, he teaches undergraduate courses in Economic Growth and Environment and Ph.D. courses in International Economics and Development Economics.