REDD and Forest Transition: Tunnelling through the Environmental Kuznets Curve

International attention is focused on finding ways to reduce emissions from deforestation because of theemerging concerns over climate change. However the causes of deforestation are rooted in current economicand development paradigms. The causes of deforestation also vary across different geographical regions andhave implications for the forest transition. Attempts to reach an international agreement on curbing deforestationhave achieved little success despite over 30 years of UN negotiations. New initiatives from REDD (ReducingEmissions from Deforestation and forest Degradation) could provide financial incentives to curbdeforestation. Hence, alternative development paths for forest cover changes and forest transition are analyzedfor the REDD policy within the framework of an environmental Kuznets curve (EKC) for deforestation.The EKC models are estimated for geographical regions of Latin America, Africa and Asia. The results based onthe panel data analysis of 43 countries, covering the period 1970'1994, provides evidence that an inverted UshapedEKC fits for Latin America and Africa, while a U-shaped EKC applies to Asia. The results also indicatethat strengthening agricultural and forestry sector policies are important for curbing deforestation. The EKCmodels' estimates could provide guidance for decisions on financing the REDD policy as specific to eachregion.