Year of Graduation

2018

Document Type

Thesis

Major

Economics

Directing Professor

Pablo Hernandez

Abstract

The environmental history of the twentieth century in Southeast Asia reveals tremendous loss of forested areas as a consequence of unprecedented economic transformations and unrestrained globalization. Featuring some of the world’s fastest-growing economies, Southeast Asia has been experiencing fundamental changes in its economic structure, sociopolitical institutions, and the rate of natural resources extraction and depletion, including deforestation. This study reexamines evidence of the (EKC) hypothesis in light of the deforestation the above region experienced over the period 1990-2013. We use the change in forest cover as an indicator for environmental degradation. A panel co-integration approach is invoked to investigate the presence of the EKC hypothesis for two different data panels, gauging the effects of changes in economic structure, agricultural productivity, institutional factors, demographic transformation, renewable energy, and international trade across Southeast Asian countries. We do not find evidence of the EKC. However, our results confirm the negative impacts of increasing agricultural productivity on forest stocks. We identify major Granger causality relationships between economic growth, the ratio of the value of the exported forest products to the value of imported manufactures, the share of agriculture, forestry and fisheries over total manufacturing, the debt ratio, trade openness, and renewable energy consumption. A variable capturing institutional change is found to play an important role in the management of forest resources. Southeast Asian countries should develop strong political foundations, using international trade to foster sustainable development paths compatible with growth and less pressure on forested land.

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