Finance

Financial crises reduce deforestation rates, new global research finds

Financial crises reduce deforestation rates, new global research finds

sustainability science (2022). DOI: 10.1007/s11625-021-01086-8″ width=”685″ height=”530″/>

Global and regional effects of financial crises on commodities that are major contributors to deforestation, including the production of roundwood, livestock, cocoa, palm oil and soybeans (coffee production has not produced significant results). OLS and GMM specifications are given. The income groups are Low Income (LI), Lower Middle Income (LMI), Upper Middle Income (UMI), and High Income (HI). Significance levels are indicated, while non-significant results are defined as “ns”. Standard errors are included. Credit: sustainability science (2022). DOI: 10.1007/s11625-021-01086-8

For the first time, financial crises have been shown to reduce deforestation rates, new research from Sussex finds

In the paper, Sussex researchers studied the impacts of financial crises on deforestation by analyzing data from 150 countries during more than 100 periods of financial crises in the 21st century. Additionally, key drivers of deforestation, including timber, livestock, and cocoa production, also decline during times of financial crisis.

The researchers found that although deforestation rates decline during times of financial instability, rates vary from region to region with the greatest effects in Asia and Africa and in low-income countries. It has been found that financial crises will affect deforestation rates more in low-income countries due to more sustained pressure on commodity-induced deforestation.

With financial crises recognized by the UN as a very real threat to the global development agenda, this research convincingly demonstrates that we cannot rely on reduced economic activity to mitigate environmental impacts.

Alexander Antonarakis, associate professor of global change ecology at the School of Global Studies and lead author of the paper, said:

“There are wider implications here. We cannot continue to degrade the environment during times of financial boom. It is critically important that we rethink our current economic model to find lasting links between sustainable food and sustaining sustainable ecosystems, such as forests.

“As we have seen during the COVID pandemic, a reduction in economic activity can be beneficial for certain environmental indicators, leading to a reduction in air pollution and greenhouse gas emissions, at least less in the short term.Yet the UN said the pandemic has potentially reversed hard-won environmental progress, with continued land degradation, large numbers of endangered species and uncontrolled production and consumption. durable.

“Our results point to a temporary respite in global deforestation dynamics during times of financial crisis. Yet, to break this link between economic performance and natural resource extraction, governments, businesses, industries and the sector financial institutions need to improve their sustainable forest management during and after times of crisis rather than allowing it to slip onto national agendas.

“Furthermore, strengthening synergies between climate and sustainability agendas is critical in the early 2020s, with less than 10 years left to achieve the Sustainable Development Goals.”

Andreas Antoniades, study co-author and associate professor of global political economy at the School of Global Studies, added:

“Our hope is that we can use our evidence to lobby and guide the global community on the data and policies needed to improve our understanding of the key forest cover dynamics that determine the planet’s environmental sustainability.”

The article, titled “The effect of financial crises on deforestation: an analysis of global and regional panel data”, was published in sustainability science last month.


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More information:
Alexander S. Antonarakis et al, The effect of financial crises on deforestation: a global and regional panel data analysis, sustainability science (2022). DOI: 10.1007/s11625-021-01086-8

Provided by the University of Sussex


Quote: Financial Crises Reduce Deforestation Rates, According to New Global Research (2022, March 25) retrieved March 25, 2022 from https://phys.org/news/2022-03-financial-crises-deforestation-global.html

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