Tropical forests are disappearing at an unaltered pace, giving way to alternative land uses. This book gives an economic perspective on deforestation. Following a survey of different deforestation definitions, theories and empirical evidence, a case-study of Ecuador provides a versatile historical picture of factors affecting forest loss throughout different periods, regions and ecosystems. It is shown that policy and market failures alone cannot explain rapid deforestation; decision-makers follow a composite economic rationale in their continuous clearing of forests which can only be counteracted by concerted action.

Deforestation in the tropics is considered to be a primary cause for worldwide loss of biological diversity. Future land use decisions have the potential to escalate or ameliorate this global problem. The goal of this research is to present a case study of an analysis of forest change within the Chocó-Andean Conservation Corridor in the Upper Guayllabamba Watershed in Northwestern Ecuador. Fieldwork, remote sensing, and a Geographic Information System (GIS) were used to analyze land use/land cover changes within the corridor. Change detection from 1986 to 2001 using Landsat imagery confirmed that forests were rapidly being converted to other land covers, but patterns of deforestation rates varied dramatically for different types of forests. The average annual rate of overall loss of forest was 2.7% for lower montane forest, 1.7% for mid-slope cloud forest 2.1% for upper montane forest, and 2.0% for riparian forests. The patterns of deforestation also varied based on scales of analysis. For example, the overall loss of forest within the southern portion of the Chocó-Andean Conservation Corridor occurred at an average rate of 1.3% per year, while the overall annual rate of forest loss within particular sub-watersheds varied from 0.2%-3.1% and the annual average rate of overall forest loss surrounding particular communities ranged from 0.3%-3.3%. Fifty interviews were conducted in 2003 in seven communities within the conservation corridor to determine local perspectives of current land use practices, past land use trends, and future land use goals; regional changes in the forest; and opinions of local conservation projects. An intriguing finding of the study is that remote sensing in isolation of fieldwork would have provided incomplete or misleading results. For example, the community that had the most deforestation between 1986 and 2001 was the community where the conservation projects were actually the most successful, based upon local resident opinion. This report asserts that a holistic approach to conservation is needed to reconcile environmental and socio-cultural needs in order to maintain and improve forest habitat and hydrologic connectivity at multiple spatial scales (including community-level, watershed, and regional) by extending conservation efforts beyond protected areas and utilizing a basin-scale perspective to make land use decisions that maintain biodiversity and promote watershed protection.