Georg-August-Universität Göttingen, Institute of Rural Development, Germany
Wood based energy is the most important energy source for a majority of households in developing countries. In contrast, however, woodfuel consumption is also a major contributor to total wood removal and, hence, deforestation. In response to this problem, forest resources in developing countries are increasingly managed through a control and command system meaning that without permits obtained from the law enforcing authorities, the extractive use of resources such as fuelwood and charcoal becomes illegal.
This paper applies a theoretical model that was developed for the illegal trade of narcotics to analyse whether a command and control system of woodfuel collection can be successful in promoting natural resource conservation. The results of this model demonstrate clearly that increasing enforcement and seizure of illegally produced fuelwood and charcoal leads to a simultaneous increase in the production of these products and, thus, contributes even more to deforestation. Furthermore, it is shown that such a system increases market prices, which can be attributed to a low price elasticity of demand on the side of the consumer due to a lack of appropriate substitutes. This has a negative impact on the economic situation of the poorest households and, thus, this policy approach does not contribute to poverty alleviation. The implications of this model are discussed with special emphasis on the inelastic demand of woodfuel in developing countries, showing that in the short- to medium-term, an increase in woodfuel consumption must be expected.
Based on the results of this model -- and knowing that command and control policy approaches frequently lead to extra-legal, rent-seeking behaviour on the side of the law enforcing authority -- it is proposed to legalise woodfuel production and marketing. Instead, policy intervention should focus on providing an appropriate institutional environment instigating tree-planting activities at the household level. Lastly, the use of wood as a source of energy is examined with special reference to the objectives of poverty alleviation.
The theoretical model is complemented by statistical analyses using data from Madagascar.
Keywords: Biodiversity conservation, deforestation, illegal trade, poverty, woodfuel consumption