An Optimal Control Model of Illegal Logging by Commercial Logging Contractors in Laos PDR

McAllister, Ryan, Beard, Rodney and Asafu-Adjaye, John (2000) An Optimal Control Model of Illegal Logging by Commercial Logging Contractors in Laos PDR. Discussion Paper No. 275, Department of Economics, The University of Queensland.

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Author McAllister, Ryan
Beard, Rodney
Asafu-Adjaye, John
Title An Optimal Control Model of Illegal Logging by Commercial Logging Contractors in Laos PDR
School, Department or Centre Department of Economics
Institution The University of Queensland
Report Number Discussion Paper No. 275
Publication date 2000-07-01
Subject 340201 Agricultural Economics
Abstract/Summary Laos is an income-poor but resource-rich country heavily dependent upon its natural forest resources. This paper uses an optimal control model to analyse deforestation in Laos. Specifically, this paper analyses illegal logging by a sole commercial logging contractor within a single region in Laos. The commercial contractor aims to maximise discounted profits from commercial contracts to log government quotas and from illegal logging. Policy implications for a government wishing to sustain a target level of forest stock are derived from the model. Results show that it is likely that the steady state level of the forest stock will be lower than the government's target. In order to minimise the difference between the target and actual levels of remnant native forest, the government can consider increasing the value of contracts awarded, the duration of contracts awarded or the level of fines imposed on detected illegal loggers. The model, however, simplified what is an extremely complex problem. Game-theoretic extensions to the modelling framework are suggested as avenues that may help the model better reflect the complexity of illegal logging and deforestation in Laos.
Keyword logging
illegal logging
Laos
deforestation
timber
models

Document type: Department Technical Report
Collection: Discussion Papers (School of Economics)
 
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Created: Fri, 13 Aug 2004, 10:00:00 EST by Belinda Weaver (EA)