Reflections on forest transition theory

Today’s column reflects on a well-known hypothesis (forest transition theory), developed in research on the dynamics of forests in human societies. This hypothesis has been advanced since the early 1990s by Professor Alexander Mather, who identified recurring regularities in the long-term historical relationship between forests and societies, both as a general global phenomenon, as well as in the specific contexts of individual societies. His research has focused on the drivers of change in the forest cover. He was based in Scotland, where he researched and lived until his death in 2006.

Before outlining this hypothesis on forest transitions I will briefly recap, for readers’ benefit, where this hypothesis fits into the present series of columns, which I have been presenting so far this year. Readers may recall that, the series of articles started with a presentation on December 27, 2015, entitled ‘El Dorado at last: Guyana in a time of oil/gas production and export’. As indicated there, my intention is to review the extractive industries sector in the political economy of Guyana’s development since Independence and for the coming years of oil/gas production and export.

In pursuit of this task, I have already considered the mineral extractive sector, in consecutive columns over the period January 3-February 28, 2016. On March 6, I further indicated my intention to address the non-mineral extractive sector, starting with forestry as the most strategic nonmineral sub-sector. It is in this context therefore, that today’s article seeks to locate today’s discussion of forest transition theory.

Forest transition theory

Prof Mather and other researchers have correctly observed that during the past two centuries (and for a wide array of societies) there have been recurring patterns involving forests. Forest transition theory sets out to provide a plausible explanation for these. However, in attempting this, a number of important theoretical questions have been raised. First, and foremost among these is whether a small, poor, highly open economy like Guyana, with a high ‘standing’ in the world of forests, can have economic growth without coming up against serious constraints posed by today’s heightened awareness of the need to minimize, if not reduce, net forest loss/deforestation to zero?

Secondly, and of similar scope, what are the observed behavioural dynamics between a country’s real GDP growth and the maintenance of its forests? Third, are there acceptable trade-offs between the goals of generating real GDP growth and the maintenance of forest cover in an economy like Guyana? Fourth, does the projected course of net forest loss/deforestation in any country normally put its economic development at risk? Fifth, will real GDP growth in a country like Guyana be enhanced or reduced by forest constraints?

These, and other similar questions directly relate to the affordability (income levels) of forest maintenance policies. The questions pose a dilemma: do these effects, (positive or negative) change with time? Forest transition theory focuses on evolving long-term patterns.

The U-shaped curve

Professor Mather and others have argued that there is an implicit U-shaped curve found in the relationship between net forest loss and economic growth, across most, if not all, societies. This Ushaped curve is analogous to the one depicted in economics, which shows the relationship between economic growth and inequality. That is termed the Kuznets curve. It is also akin to the demographic transition notion developed in population studies.

The U-shaped curve depicts that, at low levels of development, net forest loss/deforestation is negligible, and indeed limited to the consequences of subsistence or near-subsistence type economic activities. However, as other economic activities intensify (in the case of Guyana, growth in mining, agriculture, and infrastructure), industry will take off and net forest loss will increase in tandem. At substantially higher levels of income, growth, increased wealth and development, structural changes will occur. Societies will become more urbanized, modernized and technologically adaptive, thereby permitting the expansion of modern services. At this stage there is a turnaround in society’s concerns over net forest-loss/deforestation. Both government and public support for the forests increases and planted forests become a leading environmental preoccupation.

From the description given above, two points readily stand out. First, it has been observed that in many societies modernization, industrialization, and urbanization trigger the turnaround in public concern over the forests. And, second, it is indeed subsistence and near-subsistence levels of economic activity, which lead to the low or non-existent net forest loss/deforestation in the dynamic relationship between growth and deforestation.

This latter observation therefore raises cautions about forest studies in Guyana, which naively attribute its very low observed net forest loss almost exclusively to the voluntary stewardship and conservation ideals of the indigenous population! While this may be partly true, it seems to me the dominant dynamic sustaining low rates of net forest loss in Guyana is the subsistence and near-subsistence modes of production under which ‘economic’ activity has thrived in its hinterland/forest environment.

The theory behind forests transition

Apart from the historical observations of recurring patterns of, on the one hand, net forest loss and reforestation and, on the other, economic growth and levels of economic well-being there is a straightforward economic-theoretic explanation behind forests transition theory. Simply put, this states that land use and indeed the management of land is a function of land quality and socio-economic environment.

The former (land quality) refers to considerations like location, soil type and remoteness from markets. The latter (socio-economic environment) refers to the prevailing market structures, prices of inputs and outputs, and the institutional framework. When land rents, profits, or marginal revenue gain favour over other activities in the forests (for example, mining or agriculture), investors would choose one or more of those other options. It is this choice that alters land use in the forests sector and determines if deforestation, keeping the forests standing or reforestation (planting new forests) will occur.

Next week I shall wrap-up this discussion.