Essays in environmental and development economics

Abstract

This dissertation explores the intersection of environmental and development economics through three essays, centering on forests as natural capital. It investigates human–forest interactions using rigorous econometric methods, including ordinary least squares, instrumental variables (IV), difference-in-differences (DID), and quantile regression. By integrating economic, geospatial, and ecological data, the research evaluates forest-related policies at both micro (household) and macro (county) levels. The findings offer policy insights for optimizing land use, public financial investments, and household decision-making, ultimately contributing to sustainable development by balancing economic growth with environmental conservation. Essay 1 examines the effects of rural poverty alleviation on forest conservation. Using a high-resolution annual land cover dataset and a generalized DID approach, the study finds that poverty alleviation programs increased forest cover by 0.5% annually, with carbon storage benefits outweighing program costs. Rural relocation policies emerge as key drivers of conservation, highlighting a cost-effective strategy for integrating economic development with environmental restoration. Essay 2 evaluates the economic and ecological impacts of large-scale tree planting from 2002 to 2019 using an IV approach. While afforestation enhances grain production—particularly four to eight years after planting—it negatively affects GDP in primary and secondary sectors. The findings reveal an inverted U-shaped relationship between plantation forest maturity and grain production, underscoring the need to balance ecological benefits with economic trade-offs. Essay 3 investigates the long-term effects of China’s Grain for Green (GfG) program, which subsidizes farmers to convert cropland on steep slopes into forests. Using national survey data and a DID framework with multiple treatment periods, the study finds that GfG increases household income and expenditure, primarily through farm income growth and government subsidies. Households reallocate land from staple crops to soybeans and cash crops, improving soybean productivity.