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Producing oil helps countries to slow down the destruction of their forests, according to controversial new findings from the Indonesia-based Center for International Forestry Research (CIFOR).

Oil Wealth and the Fate of the Forest, published on Monday (23 June), compares incomes from oil and minerals with the extent of deforestation in eight tropical countries. The report finds that oil and mineral extraction in some cases can be good for the environment.

Oil-rich governments tend to spend more on urban development, the report says. This “stimulates the urban economy and attracts people out of the jungle and into the cities, allowing deforestation to go down”.

But environmental groups are unimpressed. Ed Matthew, forests campaigner with Friends of the Earth UK, based in London, says the findings may be correct in theory, but that in reality illegal logging and deforestation are increasing in oil-rich countries such as Gabon, Indonesia and Ecuador. Gabon is still losing is forest cover at a rate of 0.5 per cent per year, he says. 

The report’s author, environmental economist Sven Wunder, argues that agriculture and logging become less profitable for developing countries that produce and export oil. “If people can earn more money from oil and mineral activities [they] are less likely to cut down forests to farm.” Conversely, when oil revenues fall, people are more likely to return to logging and farming in forest areas.

The report cites Gabon as an example of a country where the discovery of oil in the 1970s caused a major exodus of people from forests into the cities. Since then, Gabon has seen a small increase in its forest cover, it says, compared to the average 1 per cent loss per year experienced in the average tropical country. Wunder says that such over-reliance on oil is not a wise development strategy, but is “excellent news” for forests.

Commenting on the report, Partha Dasgupta, professor of economics at the University of Cambridge, United Kingdom, says its main finding is “plausible and not at all contradictory” and has also been seen in parts of Latin America.

CIFOR is a member of the Consultative Group on International Agricultural Research, a network of mostly World Bank-funded agricultural research centres. It does not receive funding from oil or mining companies.

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