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A young herdsman tending his herd in a pasture in Nepal’s Manaslu region. © INRA, MEURET Michel

Environment and economic growth: what’s become of Nepal’s forests?

Nepal is a hilly and mountainous country where a quarter of the land is covered by forest, an essential source of energy for rural inhabitants. Researchers from INRA and their colleagues showed that firewood collection remained stable between 2003 and 2010 despite rural households’ rising living standards and energy needs. This paradox is explained by a decline in farm-based activities, which reduces pressure on forest resources. These findings, published in the Journal of the Association of Environmental and Resource Economists, emphasise that when it comes to the environment, the type of economic growth matters more than the amount of growth.

Updated on 05/25/2018
Published on 04/06/2018

Although the percentage of people living below the poverty line in Nepal fell by half between 2004 and 2011, the country remains poor. Its population is mainly rural and 25% of the country’s land is covered by forests. Nepalese forests produce wood, help reduce soil erosion around major river basins (e.g., Ganges, Brahmaputra) and provide a number of other ecosystem services, making them extremely important at a time of global change.

Researchers from INRA and their colleagues examined a threat to these ecosystems – the collection of firewood, which is an important source of energy for most Nepalese households and a main cause of forest degradation and deforestation in many developing countries. Using satellite imagery and information collected from households, the researchers analysed the relationship between forest cover and economic growth in Nepal between 2003 and 2010.

Nepalese forest cover remains stable

The authors showed that after decades of intense deforestation, forest cover across the Himalayan foothills of Nepal remained stable between 2003 and 2010. They also found that despite an increase in the number of households, there was no rise in firewood collection at the village level. It totalled about 2% of forest biomass, which is close to the natural rate of forest regeneration and likely explains the stabilisation over this period of time.

Nepalese households: changing livelihoods and increasing incomes

During the time period studied, firewood collection dropped by 8% at the household level while incomes climbed by nearly 60% and a number of other changes occurred. Household size, livestock herd numbers per household, the size of farm properties and hours spent doing farm-based work all declined. However, education rates and non-farm-based work increased.

There has also been a shift in daily household activities, from farm-based activities dependent on firewood collection (a very laborious process) to non-farm-based activities in peri-urban areas far from forests. Meanwhile, household energy expenditure nearly doubled. In 2010, energy accounted for 2% of household expenses and was mainly supplied from oil-based fuels such as liquefied petroleum gas (LPG), kerosene and fuel oil.

This research shows a connection between economic growth and the environment and that the type of economic growth matters: any analysis of such growth must consider changes happening at the household level. If rises in income are due to intensified traditional farming activities such as raising livestock, growth will come at the expense of forest cover. If higher incomes are achieved by modifying households’ livelihoods – reducing time spent on farm-based work, developing non-farm-based work activities – pressure on forest resources can be expected to fall.

Although challenging, protecting the Himalayan forests may be possible at a local, deregulated level because spontaneous forest cover stabilisation mechanisms are too weak. Nepal has instituted a massive programme to develop alternative energy sources such as biogas as well as a large-scale project to turn forest management back over to village communities.

Scientific contact(s):

Press Relations:
INRA News Office (33 (0)1 42 75 91 86)
Associated Division(s):
Social Sciences, Agriculture and Food, Rural Development and Environment.
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Forest Degradation and Economic Growth in Nepal, 2003–2010

Jean-Marie Baland, François Libois, Dilip Mookherjee

Journal of the Association of Environmental and Resource Economists 5: 401-439. https://doi.org/10.1086/695690