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Environmental and Resource Economics
The Impact of a Certification Scheme for Tropical Timber from Sustainable Forest Management on German Demand
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Boycotting tropical timber reduces its economic value and provides an incentive to burn down forests, making them available for subsequent agricultural use or livestock farming. In contrast, a certification scheme for sustainably produced timber (tropical or non-tropical) protects the forests by raising their economic value. Examined here the impact of a certification scheme on German demand for tropical timber. A partial-equilibrium model is developed for the German tropical timber market as a whole as well as for five important submarkets representing 50% of the total demand. The results reveal that a credible certification scheme can induce a significant expansion of demand for sustainably produced tropical timber. This holds true for a scheme restricted to Germany as well as for an OECD-wide approach.
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