Climate Change

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Browsing Climate Change by Subject "Deforestation,"

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    Strategic Environmental Commitment and Climate Change in Africa: Evidence on Mining and Deforestation
    (African Economic Research Consortium, 2021-09-28) Azomahou, Théophile T.; Ouédraogo, Mahamady
    This paper addresses two issues on the link between mining, deforestation and environmental policy in Africa using a panel data of 35 African countries spanning over 2001-2017. First, we study the relationship between mining and deforestation. Our findings suggest that mining increases deforestation while environmental policy contributes to reduce deforestation in mineral resource-rich countries. An increase in mineral rent by a one-point percentage of GDP leads to forest loss of about 50 km2 . Moreover, regional economic community has heterogeneous effects on deforestation consistent with the coordination policies. Second, we test the implication of these results for uncoordinated environmental policies using two measures: a de jure and a de facto environmental policy. Our results support that countries adopt a strategic behavior in response to the environmental policy of their neighbors. A 1% increase in neighbors’ environmental commitment increases one’s own environmental commitment by 0.3% and 0.8% for de jure and de facto respectively. We document that this strategic behavior leads to a race to the top for de jure environmental policy and a race to the bottom de facto environmental policy. As African countries increasingly engage in de jure environmental enforcement, their de facto efforts to mitigate climate change are slackening.