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Economic growth is good for forest cover, observes the MEI

Montreal, July 13, 2023 – A Viewpoint published by the Montreal Economic Institute this morning explains that growth in the average income of a society’s inhabitants tends to be correlated with growth in forest cover.

“A more prosperous society tends to be a greener society,” asserts Vincent Geloso, senior economist at the MEI and author of the study. “A wealthier society is also one that makes better use of its land and allows the least productive areas to be reforested.”

A study of changes in forest cover across 103 countries shows a clear trend towards net increases in forest cover in the richest countries.

According to these data, a 10% increase in average income translates into an annual increase in forest cover of 0.02 percentage points. While this figure may seem low, it is actually equivalent to one fifth of the average change in forest cover observed for these countries.

The author credits increases in productivity in the agricultural sector for the lion’s share of this success.

According to data from the Food and Agriculture Organization of the United Nations, the world’s use of agricultural land declined by about 125 million hectares between 1998 and 2020.

Over the same time span, the supply of food in kilocalories per person increased by 11%, even as the population grew by almost 31%. This indicates an overall increase in food production of 45.6% for the period.

“Far from harming the environment, economic growth—along with the increased productivity it entails—means that we are prioritizing better use of our resources,” explains Geloso. “The growing forest cover illustrates this very well: economic growth has a green thumb!”

The MEI study is available here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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