An Optimal Control Model of Deforestation in the PDR of Laos

The PDR of Laos has thus far retained a large proportion of its natural forests relative to other SE Asian countries. This disproportionally high level of forestation, along with current political and economic factors, may create an increase in the demand for Laotion timber. In particular, if the Laotion government maintains responsibility for natural timber harvesting and sets sustainable rates, then the increase in demand may flow into Laos’ illegal timber market. This paper uses an optimal control model to analyse the impact of an increase in the demand for timber. It argues that the illegal timber market damages both the environment and economy.