The Appropriateness of CGE Modelling in Analysing the Problem of Deforestation

Purpose: The paper reviews recent developments in utilising computable general equilibrium (CGE) models to analyse forestry policies. The paper highlights the application of CGE modelling to deforestation and forestry issues.Design/methodology/approach: The analysis is carried out by comparing different CGE models available in the literature, which have analysed the economic consequences of deforestation and changes in forestry policies.Findings: The use of CGE models in analysing forestry issues is still in its early stages. There is room for innovation and improvement in the various models used.Practical implications: The paper emphasises the relevance of general equilibrium analysis in the evaluation of both micro- and macro-economic policies on forestry. It encourages researchers to use general equilibrium analysis in their study of environmental problems.Originality/value: The paper highlights the contribution and possible benefits of utilising CGE models in analysing environmental problems such as deforestation, especially in the context of environment-economics trade-off.