Costs Related to Deforestation Drivers

            Many drivers come to mind when thinking of deforestation and they may be able to explain why deforestation rates have increased over the years. A few of the drivers that are important to note are mining, logging, and agriculture.

Precious metals can be discovered during mining operations, such as gold, making the low costs of deforestation appealing. According to the Amazon Aid Foundation, “there are an estimated 5 million people directly engaged in some form of artisanal mining as of 2017”. Many of these jobs include deforestation within their operations, but the gold is what they care about most. The debris of these mining sites ends up destroying not only the trees, but also the land around it. This effects the ability to provide tourism in that area. While examining the decrease in tourism, opportunity costs become associated to the land. According to Statista, the total expenses from the top mining companies worldwide equal to $515 billion, as of 2019 statistics. The total revenue equals $692 billion as of 2019. (Garside) When comparing the information of costs and revenue made during these mining operations, there is only a 34% gap between the two. Since this is a revenue statistic, that means the return, in terms of profits, is low compared to operating costs. Adding in the opportunity cost of destroying the land will ultimately affect the country’s economy but fill the mining companies’ pockets.

Another driver towards deforestation, which is important to discuss, is logging. Companies invest in logging operations to produce wood and paper for our rapidly growing population. According to Yale University, “while logging is important to regional economies and rural communities, if not managed properly, it can contribute to deforestation and forest degradation”. At the rate logging is occurring, forest preservation organizations are unable to make the impact necessary for preserving the lands natural qualities. This ultimately decreases the supply of timber at a dangerous rate. Another factor to consider is the business world mostly moving paperless, which has put pressure on the demand for timber products. With the high costs associated with logging, operations typically only provide 3% to 5.5% profit margins. (Kinney) Although most companies in the logging industry abide by the law, illegal logging has caused conflict in the timber industry. Governments have been able to catch many of these loggers operating in the black market, but the lack of regulations has caused a decrease in “global prices for timber by about 7-16%”. (Yale University)

The last driver towards deforestation that will be examined is agriculture. Agriculture takes up large pieces of land to produce crops for human, or cattle, consumption. This part of deforestation has been deemed to be important for the survival of our food industry, but agriculture has been proven to ‘starve’ our soils when done incorrectly. When farmers do not give closer examinations to their soil’s nutrients, the land becomes useless. Underdeveloped countries run into this problem quite often. The depletion of the land becomes a long-run cost that can be ignored by most farmers.

These drivers towards deforestation are important to examine because the high costs do not outweigh the potential profits. Luckily, many of these industries are dying as our technology increases. Solutions must be identified to not only save our forests, but also provide economic stability towards our future within renewable industries.

 

Work Cited

Amazon Aid Foundation “The Cost.”, 12 Dec. 2019, www.amazonaid.org/jeweler-toolkit/the-cost/.

Garside, M. “Topic: Mining.” Statista, 2019, www.statista.com/topics/1143/mining/.

Kinney, Suz-Anne. “A Complete Look at Logger Expenses.” Forest2Market, 2014, www.forest2market.com/blog/a-complete-look-at-logger-expenses.

Yale University. “Illegal Logging.” Global Forest Atlas, 11/6/2020, www.globalforestatlas.yale.edu/forest-use-logging/logging/illegal-logging.

Yale University “Logging” Global Forest Atlas, 11/6/2020 www.globalforestatlas.yale.edu/forest-use-logging/logging.