Deforestation, biological conservation and the optimal provision of wildlife reserves

This paper uses the species-area relation to characterize the optimal deforestation programme and to determine the optimal provision of wildlife reserves for tropical rainforest countries. These decisions, it is shown, must be taken jointly. The model constructed in this paper is more general than those used previously for analysis of the economics for environmental preservation. Provided a very simple inequality is satisfied, it will be optimal to set aside a greater quantity of wildlife reserves , and to choose a slower rate of deforestation, even if the marginal returns to deforestation increase over time. Implications for policy are discussed.