A Note on High Discount Rates and Depletion of Primary Forests

Abstract

Conventional wisdom implies that high discount rates accelerate depletion of tropical forests. As shown in this article, this result does not necessarily hold in a two-state variable model that distinguishes between primary and secondary forest stocks. In the context of a fixed concession period and imperfect government control, logging of primary forests may be both accelerated and depressed as discount rates increase.

Keywords

• conservation of primary and secondary forests
• discount rates
• timber concessions
• tropical deforestation