Taking Differences in Institutional Quality into Account in Global Forest Modelling

Wehkamp, J., Pietsch, S. ORCID: https://orcid.org/0000-0001-6431-2212, Kraxner, F., Reuter, W., Fuß, S., Gusti, M., & Koch, N. (2015). Taking Differences in Institutional Quality into Account in Global Forest Modelling. In: Systems Analysis 2015 - A Conference in Celebration of Howard Raiffa, 11 -13 November, 2015, Laxenburg, Austria.

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Abstract

Forest cover and land-use change models are commonly used for climate scenarios and provide policy advice. The IIASA Global Forest Model (G4M) compares the net present value of agriculture and forestry, and makes a land-use change decision, based on this comparison.
Moving beyond this purely economic rationale, we aimed at understanding in how far integrating differences in environmental institutional quality, could allow improving the representation of forest cover change processes of the model. Through an econometric regression analysis, we identified the most significant out of a larger set of variables on environmental institutional quality and created a composite index. We then implemented the composite index into the model. Its components are: the internalization of environmental norms, the strength of institutions, the ability of the institutions to guarantee macroeconomic stability, the quality of the administration and the efficiency of the bureaucracy.
Through the inclusion of the composite index, the model’s residual could be significantly reduced. The results suggest that future research should consider taking differences in environmental institutional quality into account to improve modeling of deforestation processes. Moreover, the implementation of the index into the model allows for the first time to create scenarios for institutional quality and its impact on forest cover.

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