Is the Log Export Ban an Efficient Instrument for Economic Development and Environmental Protection? The Case of Indonesia

The effectiveness of a log export ban policy in achieving the twin goals of conservation and economic development has been vigorously debated by many researchers and policymakers for the last two decades or so. Despite the abundance of work focusing on this issue that demonstrates the perversity of such policies, many countries around the world still implement them. This paper will first review the economic and political arguments in regard to the pros and cons of this policy. Second, it will review the Indonesian experience in implementing a log export ban policy in the 1980s and 2000s. Third, using a computable general equilibrium model, this paper will predict the anticipated impact of implementing a log export ban policy on the national economy and on household incomes for various socioeconomic groups. (c) 2006 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.