Article Sidebar

Submitted
October 9, 2021
Accepted
December 28, 2021
Published
February 14, 2022
Download
PDF
Statistic
Read Counter : 841 Download : 266

Downloads

Download data is not yet available.

Main Article Content

Abstract

Forests are unique resources and environments because, in general, they provide many benefits. Changing the function of forest areas to other functions is inseparable from economic development. As a developing country, Indonesia's economy is still dependent on natural resources to support its development. Economic integration through trade openness plays a vital role in economic growth. Policies that enhance the country's ability to trade will help the economy to develop. The more open the trade regime will make the country specialize in semi-finished input products, its competitive advantage. However, economic integration also creates negative externalities in the form of increased deforestation. This study explores the effect of trade openness on deforestation using a panel data method in 20 provinces in Indonesia from 2008-2018. Not many studies have focused on trade openness, large plantations, and social interactions as the driving forces behind deforestation in Indonesia. From the estimation results of the model, it is known that trade openness, economic growth, and activities of logging and forest conversion each contribute to changes in forest cover. If the commodity price rises, it will impact decreasing forest cover. Also, increasing population and density have decreased forest cover because land outside the forest area is limited.

Keywords

trade openness deforestation forest cover Indonesia

Article Details

License

Authors who publish with this journal agree to the terms:

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

Creative Commons License

Jurnal Ekonomi Pembangunan is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License..

Author Biography

Andi Kustanto, Department of Economics, Universitas Sultan Ageng Tirtayasa

Department of Economics
How to Cite
Kustanto, A. (2022). Does Trade Openness Cause Deforestation? A Case Study from Indonesia. Jurnal Ekonomi Pembangunan, 19(2), 165–182. https://doi.org/10.29259/jep.v19i2.15530
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Abman, R., & Lundberg, C. (2020). Does Free Trade Increase Deforestation? The Effects of Regional Trade Agreements. Journal of the Association of Environmental and Resource Economists, 7(1), 35–72. https://doi.org/10.1086/705787
  2. Al-Rodhan, N. R. F., & Stoudmann, G. (2006). Definitions of Globalization: A Comprehensive Overview and a Proposed Definition. Geneva Centre for Security Policy.
  3. Amsden, A. H. (2001). The rise of “the rest”: Challenges To The West From Late-Industrializing Economies. Oxford University Press. https://doi.org/10.1093/0195139690.001.0001
  4. Angelsen, A., Shitindi, E. F. K., & Aarrestad, J. (1998). On the Economics of Deforestation with Regional Panel Data Evidence from Tanzania (No. 0498).
  5. Austin, K. G., Schwantes, A., Gu, Y., & Kasibhatla, P. S. (2019). What causes deforestation in Indonesia?. Environmental Research Letters, 14(2). https://doi.org/10.1088/1748-9326/aaf6db
  6. Baltagi, B. H. (2015). Econometric Analysis of Panel Data (5th Ed.). John Wiley & Sons Ltd.
  7. Barbier, E. B. (2001). The Economics of Forest Land Use and Management: An Introduction to the Special Issue. Land Economics, 77(2), 155–171. https://doi.org/10.2307/3147087
  8. Barbier, E. B. (2002). Institutional constraints and deforestation: An application to Mexico. Economic Inquiry, 40(3), 508–519. https://doi.org/10.1093/ei/40.3.508
  9. Belcher, M., & Gennino, A. (1993). Southeast Asia Rainforests: A Resource Guide and Directory. Rainforest Action Network.
  10. Belloumi, M., & Alshehry, A. (2020). The impact of international trade on sustainable development in Saudi Arabia. Sustainability, 12(13). https://doi.org/10.3390/su12135421
  11. Bohn, H., & Deacon, R. T. (2000). Ownership risk, investment, and the use of natural resources. American Economic Review, 90(3), 526–549. https://doi.org/10.1257/aer.90.3.526
  12. Boubacar, I. (2012). Neighboring effects of deforestation: a spatial econometric approach. Environmental Economics, 3(3), 72–81.
  13. Brack, D. (2019). Forest and Climate Change. In United Nations Forum on Forests.
  14. Darmawan, R., Klasen, S., & Nuryantono, N. (2015). Migration and deforestation in Indonesia. In EFForTS Discussion Paper Series (No. 19).
  15. Davin, E. L., & de Noblet-Ducoudre, N. (2010). Climatic impact of global-scale Deforestation: Radiative versus nonradiative processes. Journal of Climate, 23(1), 97–112. https://doi.org/10.1175/2009JCLI3102.1
  16. Dudley, N., Jeanrenaud, J.-P., & Sullivan, F. (1995). Bad Harvest: The Timber Trade and the Degradation of Global Forests. Routledge.
  17. Falkner, R. (2013). The Handbook of Global Climate and Environment Policy. John Wiley & Sons Ltd. www.wiley.com/wiley-blackwell.
  18. Faria, W. R., & Almeida, A. N. (2016). Relationship between openness to trade and deforestation: Empirical evidence from the Brazilian Amazon. Ecological Economics, 121, 85–97. https://doi.org/10.1016/j.ecolecon.2015.11.014
  19. Fehlenberg, V., Baumann, M., Gasparri, N. I., Piquer-Rodriguez, M., Gavier-Pizarro, G., & Kuemmerle, T. (2017). The role of soybean production as an underlying driver of deforestation in the South American Chaco. Global Environmental Change, 45(August 2016), 24–34. https://doi.org/10.1016/j.gloenvcha.2017.05.001
  20. Ferreira, S. (2004). Deforestation, Property Rights, and International Trade. Land Economics, 80(2), 174–193. https://doi.org/10.2307/3654737
  21. Fisher, B., Edwards, D. P., Larsen, T. H., Ansell, F. A., Hsu, W. W., Roberts, C. S., & Wilcove, D. S. (2011). Cost-effective conservation: Calculating biodiversity and logging trade-offs in Southeast Asia. Conservation Letters, 4(6), 443–450. https://doi.org/10.1111/j.1755-263X.2011.00198.x
  22. Forest Watch Indonesia. (2019). Angka Deporestasi Sebagai “Alarm” Memburuknya Hutan Indonesia.
  23. Frankel, J. A., & Rose, A. K. (2005). Is Trade Good or Bad for the Environment? Sorting Out the Causality. Review of Economics and Statistics, 87(February), 85–91. DOI 10.3386/w9201
  24. Fraser, A. I. (1998). Social, Economic and Political Aspects of Forest Clearance and Land-USe Planning in Indonesia. In B. K. Maloney (Ed.), Human Activities and the Tropical Rainforest (pp. 133–150). Kluwer Academic Publishers.
  25. Galinato, G. I., & Galinato, S. P. (2012). The Effects of Corruption Control, Political Stability and Economic Growth on Deforestation-Induced Carbon Dioxide Emissions. Environment and Development Economics, 17(1), 67–90. https://doi.org/10.1017/S1355770X11000222
  26. Gaveau, D L A, Curran, L. M., Paoli, G. D., Carlson, K. M., Wells, P., & Ratnasari, D. (2012). Examining protected area effectiveness in Sumatra: importance of regulations governing unprotected lands. Conservation Letters, 5, 142–148. https://doi.org/10.1111/j.1755-263X.2011.00220.x
  27. Gaveau, David L A, Kshatriya, M., Sheil, D., Sloan, S., Molidena, E., Wijaya, A., Wich, S., Ancrenaz, M., Hansen, M., Broich, M., Guariguata, M. R., Pacheco, P., Potarov, P., Turubanova, S., & Meijaard, E. (2013). Reconciling Forest Conservation and Logging in Indonesian Borneo. PLoS ONE, 8(8). https://doi.org/10.1371/journal.pone.0069887
  28. Gaveau, David L A, Sheil, D., Salim, M. A., Arjasakusuma, S., Ancrenaz, M., Pacheco, P., & Meijaard, E. (2016). Rapid conversions and avoided deforestation: examining four decades of industrial plantation expansion in Borneo. Nature Publishing Group, October 2015, 1–13. https://doi.org/10.1038/srep32017
  29. Gazzola, P., & Querci, E. (2017). The Connection Between the Quality of Life and Sustainable Ecological Development. European Scientific Journal, April, 361–375. https://doi.org/doi.org/10.19044/esj.2017.v13n12p%25p
  30. Gräbner, C., Heimberger, P., Kapeller, J., & Springholz, F. (2021). Understanding economic openness: a review of existing measures. Review of World Economics, 157(1), 87–120. https://doi.org/10.1007/s10290-020-00391-1
  31. Greenwald, B., & Stiglitz, J. E. (2014). Industrial policies, the creation of a learning society, and economic development. In J. E. Stiglitz & J. T. Lin (Eds.), The industrial policy revolution: The role of government beyond ideology. Palgrave Macmillan.
  32. Grogan, K., Pflugmacher, D., Hostert, P., Mertz, O., & Fensholt, R. (2019). Unravelling the link between global rubber price and tropical deforestation in Cambodia. Nature Plants, 5(1), 47–53. https://doi.org/10.1038/s41477-018-0325-4
  33. Hamdi, H., & Sbia, R. (2013). The Relationship Between Natural Resources Rent, Trade Openness and Economic Growth in Algeria. Economic Bulletin, 33(2), 1649–1659.
  34. Hecht, S. B., & Saatchi, S. S. (2007). Globalization and Forest Resurgence: Changes in Forest Cover in El Salvador. BioScience, 57(8), 663–672. https://doi.org/10.1641/b570806
  35. Indarto, J., Kaneko, S., & Kawata, K. (2015). Do forest permits cause deforestation in Indonesia?. International Forestry Review, 17(2), 165–181. https://doi.org/10.1505/146554815815500651
  36. IPCC. (2008). Climate Change 2007: Synthesis Report. Contribution of Working Groups I, II and III to the Fourth Assess- ment Report of the Intergovernmental Panel on Climate Change (T. C. W. Team, R. K. Pachauri, & A. Reisinger (eds.)).
  37. Jiang, M., Kim, E., & Woo, Y. (2020). The relationship between economic growth and air pollution—a regional comparison between China and South Korea. International Journal of Environmental Research and Public Health, 17(2761), 1–20. https://doi.org/10.3390/ijerph17082761
  38. Joshi, P., & Beck, K. (2017). Environmental Kuznets curve for deforestation: Evidence using GMM estimation for OECD and non-OECD regions. IForest, 10(1), 196–203. https://doi.org/10.3832/ifor2066-009
  39. Kaimowitz, D., & Angelsen, A. (1998). Economic Models of Tropical Deforestation: A Review. In Center for International Forestry Research. https://doi.org/10.17528/cifor/000341
  40. Kissinger, G., Herold, M., Sy, V. De, Angelsen, A., Bietta, F., Bodganski, A., Boucher, D., Boyle, T., Brickell, E., Defries, R., Dragisic, C., Elias, P., Enters, T., Kishwan, J., Loisel, C., Lotsch, A., Masripatin, N., Neufeldt, H., Ngarize, S., … Wolf, R. (2012). Drivers of Deforestation and Forest Degradation. or REDD+ Policymakers.
  41. Krugman, P., Obstfeld, M., & Melitz, M. (2018). International Economics: Theory and Policy (11th Ed.). Pearson.
  42. Kustanto, A. (2020). Pertumbuhan Ekonomi Regional di Indonesia: Peran Infrastruktur, Modal Manusia dan Keterbukaan Perdagangan. Buletin Studi Ekonomi, 25(1), 80–98. https://doi.org/10.24843/BSE.2020.v25.i01.p05
  43. Lawrence, R. Z., Rodrik, D., & Whalley, J. (1996). Emerging agenda for global trade: High stakes for developing countries. Johns Hopkins University Press.
  44. López, R., & Galinato, G. I. (2005). Trade policies, economic growth, and the direct causes of deforestation. Land Economics, 81(2), 145–169. https://doi.org/10.3368/le.81.2.145
  45. Margono, B. A., Turubanova, S., Zhuravleva, I., Potapov, P., Tyukavina, A., Baccini, A., Goetz, S., & Hansen, M. C. (2012). Mapping and monitoring deforestation and forest degradation in Sumatra (Indonesia) using Landsat time series data Sets from 1990 to 2010. Environmental Research Letters, 7(3), 1-16. https://doi.org/10.1088/1748-9326/7/3/034010
  46. Martínez Licetti, M., Iootty, M., Goodwin, T., & Signoret, J. (2018). Strengthening Argentina’s Integration into the Global Economy: Policy Proposals for Trade, Investment, and Competition. In Strengthening Argentina’s Integration into the Global Economy: Policy Proposals for Trade, Investment, and Competition. The World Bank. https://doi.org/10.1596/978-1-4648-1275-0
  47. Mather, A. S., & Needle, C. L. (2000). The Relationships of Population and Forest Trends. Geographical Journal, 166(1), 2–13. https://doi.org/10.1111/j.1475-4959.2000.tb00002.x
  48. McEwan, A., Marchi, E., Spinelli, R., & Brink, M. (2020). Past, present and future of industrial plantation forestry and implication on future timber harvesting technology. Journal of Forestry Research, 31(2), 339–351. https://doi.org/10.1007/s11676-019-01019-3
  49. Meijaard, E., & Sheil, D. (2007). A logged forest in Borneo is better than none at all. Nature, 446(April), 974.
  50. Meijide, A., Badu, C. S., Moyano, F., Tiralla, N., Gunawan, D., & Knohl, A. (2018). Impact of forest conversion to oil palm and rubber plantations on microclimate and the role of the 2015 ENSO event. Agricultural and Forest Meteorology, 252(October 2017), 208–219. https://doi.org/10.1016/j.agrformet.2018.01.013
  51. Mendelsohn, R. (1994). Property Rights and Tropical Deforestation. Oxford Economic Papers, 46, 750–756.
  52. Milner, H., & Kubota, K. (2005). Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries. International Organization, 59(1), 107–143. https://doi.org/doi.org/10.1017/S002081830505006X
  53. Ministry of Environment. (2009). Summary for Policy Makers: Indonesia Second National Communication under The United Nation Framework Convention on Climate Change (UNFCCC).
  54. Ministry of Environment and Forestry. (2018). Status Hutan & Kehutanan Indonesia 2018.
  55. Miyamoto, M. (2020). Poverty reduction saves forests sustainably: Lessons for deforestation policies. World Development, 127, 104746. https://doi.org/10.1016/j.worlddev.2019.104746
  56. Miyamoto, M., Mohd, M., Noor, Z., & Michinaka, T. (2014). Forest Policy and Economics Proximate and underlying causes of forest cover change in Peninsular Malaysia. Forest Policy and Economics, 44, 18–25. https://doi.org/10.1016/j.forpol.2014.05.007
  57. Mohamed, E. S. E. (2020). Resource Rents, Human Development and Economic Growth in Sudan. Economies, 8(99), 1–22. https://doi.org/10.3390/economies8040099
  58. Najam, A., Huq, S., & Sokona, Y. (2003). Climate negotiations beyond kyoto: Developing countries concerns and interests. Climate Policy, 3(3), 221–231. https://doi.org/10.3763/cpol.2003.0329
  59. National Academy of Engineering. (1994). Greening of industrial ecosystems. The National Academies Press. https://doi.org/10.17226/2129
  60. Ogundari, K., Ademuwagun, A. A., & Ajao, O. A. (2017). Revisiting Environmental Kuznets Curve in Sub-Sahara Africa: Evidence from deforestation and all GHG emissions from agriculture. International Journal of Social Economics, 44(2), 222–231. https://doi.org/10.1108/IJSE-02-2015-0034
  61. Oladipo, E. (2015). Global Impact of Environmental Sustainability on Deforestation. International Journal of Scientific and Engineering Research, 6(9), 103–115. DOI:10.14299/000000
  62. Omran, A., & Schwarz-Herion, O. (2020). Deforestation in Malaysia: The Current Practice and the Way Forward. Sustaining our Environment for Better Future. 175-193. https://doi.org/10.1007/978-981-13-7158-5_11
  63. Osland, J. S., Dhanda, K. K., & Yuthas, K. J. (2002). Globalization and environmental sustainability: An analysis of the impact of globalization using the Natural Step framework. In S. Sharma & M. Starik (Eds.), Research in corporate sustainability: The evolving theory and practice of organizations in the natural environment (pp. 31–60). Edward Elgar.
  64. Otter, D., & Wetherly, P. (2014). The Business Environment: Themes and Issues in a Globalizing World. Oxford University Press.
  65. Owusu-Antwi, G., Antwi, J., & Poku, P. K. (2013). Foreign Direct Investment: A Journey to Economic Growth in Ghana - Empirical Evidence. International Business & Economics Research Journal, 12(5), 573–584. https://doi.org/doi.org/10.19030/iber.v12i5.7832
  66. Parid, M. M., Miyamoto, M., Aini, Z. N., Lim, H., & Michinaka, T. (2013). Workshop On REDD+ Research Project in Peninsular Malaysia. In O. Hamdan, H. K. Aziz, G. Takao, T. Sato, & M. M. Parid (Eds.), Eradicting Extreme Poverty through Land Development Strategy (pp. 81–91). Forest Research Institute Malaysia. https://doi.org/10.1016/j.worlddev.2019.104746
  67. Partiti, E. (2020). Regulating trade in forest-risk commodities. Journal of World Trade, 54(1), 31–58. https://doi.org/10.2139/ssrn.3406718
  68. Peters, G. P., Marland, G., Le Quéré, C., Boden, T., Canadell, J. G., & Raupach, M. R. (2012). Rapid growth in CO 2 emissions after the 2008-2009 global financial crisis. Nature Climate Change, 2(1), 2–4. https://doi.org/10.1038/nclimate1332
  69. Pilinkiene, V. (2016). Trade openness, economic growth and competitiveness. The case of the Central and Eastern European Countries. Engineering Economics, 27(2), 185–194. https://doi.org/10.5755/j01.ee.27.2.14013
  70. Pirard, R., Dal Secco, L., & Warman, R. (2016). Do timber plantations contribute to forest conservation? Environmental Science and Policy, 57, 122–130. https://doi.org/10.1016/j.envsci.2015.12.010
  71. Romijn, E., Ainembabazi, J. H., Wijaya, A., Herold, M., Angelsen, A., Verchot, L., & Murdiyarso, D. (2013). Exploring Different Forest Definitions and Their Impact on developing REDD+ Reference Emission Levels: A case Study for Indonesia. Environmental Science and Policy, 33, 246–259. https://doi.org/10.1016/j.envsci.2013.06.002
  72. Rudel, T. K. (2007). Changing agents of deforestation: From state-initiated to enterprise driven processes, 1970-2000. Land Use Policy, 24(1), 35–41. https://doi.org/10.1016/j.landusepol.2005.11.004
  73. Ryan, S. J., Palace, M. W., Hartter, J., Diem, J. E., Chapman, C. A., & Southworth, J. (2017). Population Pressure and Global Markets Drive A Decade of Forest Cover Change in Africa’s Albertine Rift. Applied Geography, 81, 52–59. https://doi.org/10.1016/j.apgeog.2017.02.009
  74. Salazar-Xirinachs, J. M., Nübler, I., & Kozul-Wright, R. (2014). Industrial Policy, Productive Transformation and Jobs: Theory, History and Practice. In Transforming Economies: Making Industrial Policy Work for Growth, Jobs and Development. International Labour Organization.
  75. Scrieciu, S. S. (2007). Can economic causes of tropical deforestation be identified at a global level?. Ecological Economics, 62(3–4), 603–612. https://doi.org/10.1016/j.ecolecon.2006.07.028
  76. Socolow, R., Andrews, C., Brekhout, F., & Thomas, V. (1994). Industrial Ecology and Global Change. Cambridge University Press.
  77. Sunderlin, W. D., & Resosudarmo, I. A. P. (1997). Laju dan penyebab deforestasi di Indonesia: penelaahan kerancuan dan penyelesaiannya. In CIFOR Occasional Paper (Vol. 9, Issue I). https://doi.org/10.17528/cifor/000057
  78. Surugiu, M.-R., & Surugiu, C. (2015). International Trade, Globalization and Economic Interdependence between European Countries: Implications for Businesses and Marketing Framework. Procedia Economics and Finance, 32, 131–138. https://doi.org/10.1016/S2212-5671(15)01374-X
  79. Taubert, F., Fischer, R., Groeneveld, J., Lehmann, S., Müller, M. S., Rödig, E., Wiegand, T., & Huth, A. (2018). Global patterns of tropical forest fragmentation. Nature, 554(7693), 519–522. https://doi.org/10.1038/nature25508
  80. Tjandrakirana, R., & Tambunan, M. (2006). Analisis Penutupan Hutan Sebagai Taksiran Deforestasi: Suatu Model Ekonometrika. Jurnal Ekonomi Dan Pembangunan Indonesia, VII(01), 47–61.
  81. Todaro, M. P., & Smith, S. C. (2012). Economic Development. Pearson Education.
  82. Tsurumi, T., & Managi, S. (2014). The effect of trade openness on deforestation: empirical analysis for 142 countries. Environmental Economics and Policy Studies, 16(4), 305–324. https://doi.org/10.1007/s10018-012-0051-5
  83. United Nations. (2020). Sustainable development goal 15. https://sustainabledevelopment.un.org/sdg15
  84. Van, P. N., & Azomahou, T. (2007). Nonlinearities and Heterogeneity in Environmental Quality: An empirical Analysis of Deforestation. Journal of Development Economics, 84, 291–309. https://doi.org/10.1016/j.jdeveco.2005.10.004
  85. Vespignani, J., Raghavan, M., & Majumder, M. K. (2019). Oil Curse, Economic Growth and Trade Openness. Globalization Institute Working Papers (No. 370). https://doi.org/10.24149/gwp370
  86. WALHI. (1992). Violated Trust: Disregard for the Forests and Forest Laws of Indonesia.
  87. Wang, J., Sui, L., Yang, X., Wang, Z., Ge, D., Kang, J., Yang, F., Liu, Y., & Liu, B. (2019). Economic Globalization Impacts on the Ecological Environment of Inland Developing Countries: A Case Study of Laos from the Perspective of the Land Use/Cover Change. Sustainability, 11, 1–21. https://doi.org/doi:10.3390/su11143940
  88. Warren-Thomas, E. M., Edwards, D. P., Bebber, D. P., Chhang, P., Diment, A. N., Evans, T. D., Lambrick, F. H., Maxwell, J. F., Nut, M., O’Kelly, H. J., Theilade, I., & Dolman, P. M. (2018). Protecting tropical forests from the rapid expansion of rubber using carbon payments. Nature Communications, 9(1). https://doi.org/10.1038/s41467-018-03287-9
  89. Were, M. (2015). Differential effects of trade on economic growth and investment: A cross-country empirical investigation. Journal of African Trade, 2(1–2), 71. https://doi.org/10.1016/j.joat.2015.08.002
  90. Werf, G., Morton, D., Defries, R., Olivier, J., Kasibhatla, P., Jackson, R., Collatz, G., & Randerson, J. (2009). CO2 emissions from forest loss (vol 2, page 737, 2009). Nature Geoscience, 2, 829. https://doi.org/10.1038/ngeo720
  91. World Bank. (2010). World Development Report. World Bank Group. https://doi.org/10.3334/CDIAC/cli.002

Similar Articles

1 2 > >> 

You may also start an advanced similarity search for this article.