Timber logging has played important roles to local economy decades ago. However, there’s renewed practice called reduced-impact logging (RIL) that being promoted. Hence a paper showing how to estimate the impact of RIL to district economy.
The impact assessment was done using a dynamic recursive CGE model. It simulates a policy to implement reduced-impact logging (RIL) by inducing a seven percent raise in logging cost.
According to the scientists, the result assessment explaining that impact of the policy to the district (hence in Berau of east Kalimantan, Indonesia) economy is small. Agricultural-based households’ welfare decreased (with forestry households the most impacted) while non-agricultural households were better off.
The assessment is published in a research paper of New Zealand Agricultural and Resource Economics Society. It authored by Kadim Martana, James Lennox, David Evison and Bruce Manley.
“As logging output declines, other agricultural outputs increase, since factors of production that are not used in the logging sector, are re-employed in other agricultural sectors, especially the oil palm sector, ” says Kadim Martana.
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