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The economic and environmental effects of an EU ban on illegal logging imports. Insights from a CGE assessment

Published online by Cambridge University Press:  18 January 2013

Francesco Bosello
Affiliation:
Fondazione Eni Enrico Mattei, University of Milan and Euro-Mediterranean Center on Climate Change, Italy. E-mail: francesco.bosello@feem.it
Ramiro Parrado
Affiliation:
Fondazione Eni Enrico Mattei, Isola di S. Giorgio Maggiore, 30124 Venice, Italy; Euro-Mediterranean Center on Climate Change and Ca'Foscari University, Italy. E-mail: ramiro.parrado@feem.it
Renato Rosa
Affiliation:
Fondazione Eni Enrico Mattei, Italy and Nova School of Business and Economics, Portugal. E-mail: renato.rosa@novasbe.pt

Abstract

The European Union (EU) is now discussing a legislation proposal to ban illegal timber from the EU market. We use the ICES model to estimate the reallocation of global demand and timber imports following the EU legislation. We aim to assess the economic impacts and measure the potential emission reduction resulting from the introduction of this policy. Results show that an EU ban targeting only log imports is not effective in reducing illegal logging, but its main effect is the removal of illegal logs from international markets. Additionally, the unilateral EU ban increases secondary wood production in illegal logging countries as their exports become relatively more competitive. Through this mechanism, part of the banned illegal timber will re-enter international trade flows ‘hidden’ as processed wood. Extending the ban to timber processed products eliminates this effect and reinforces direct carbon emissions reduction from logging activities.

Type
Research Article
Copyright
Copyright © Cambridge University Press 2013

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