Deforestation and GDP in the Amazon, Indonesia, and Congo Basins - July 1995 to 2020s

Deforestation and GDP in the Amazon, Indonesia, and Congo Basins - July 1995 to 2020s

1990s - Contradiction between Deforestation and Economic Growth
The 1990s saw rapid deforestation in the Brazilian Amazon, Indonesia, and the African Congo Basin. In these regions, short-term economic growth was achieved through agricultural development and timber exports, but behind this growth lay environmental costs that were not reflected in GDP.

In the Brazilian Amazon region, agricultural land development and timber exports have been progressing since the 1970s, resulting in the loss of approximately 10,000 square kilometers of forest each year. This resulted in the emission of approximately 4,000,000 tons of CO₂ each year, accelerating global warming. At this point, environmental problems such as soil degradation and ecosystem collapse began to emerge, but these effects were not fully reflected in GDP. Deforestation in the Amazon was the price to pay for short-term economic growth, jeopardizing long-term sustainability.

In Indonesia, deforestation proceeded rapidly as palm oil production expanded. Slash-and-burn farming in wetlands was accompanied by the release of greenhouse gases such as CO₂ and methane, causing air pollution, which in turn affected neighboring countries. This made Indonesia the world's third largest emitter of greenhouse gases and increased environmental costs, but its GDP reflected economic growth from palm oil exports.

Meanwhile, the Congo Basin in Africa similarly experienced agricultural land development and illegal logging. The forests in the Congo Basin were considered "carbon stores" and were responsible for absorbing about 880,000,000 tons of carbon, but tens of millions of tons of CO₂ were released each year, reducing their carbon-absorbing function. This has severely affected the livelihoods of local residents and ecosystems, and the restoration was expected to be extremely costly, but this burden was not reflected in the GDP.

2000s - Environmental Awareness and New Economic Indicators
The 2000s saw the introduction of "green GDP" in some countries, which takes into account the impact of environmental destruction. Costa Rica, in particular, promoted the introduction of "green GDP" to reflect environmental costs such as deforestation and water pollution in economic indicators, and the country saw an increase in forest area and other environmental protection benefits. Ecotourism flourished, and annual tourism revenues grew to billions of dollars. With these long-term benefits built into the GDP, sustainable development was realized, and the country became a leading example that will influence other countries.

Also in Japan, companies such as Hitachi, Ltd. and Seiko Epson Corporation have introduced CFC gas reduction and ozone layer protection technologies that have resulted in annual reductions of more than 1,000 tons of CO₂ equivalent. However, these corporate environmental contributions were not directly reflected in GDP, but were enjoyed by society as a whole as a public good, and the gap between the environment and the economy remained.

The 2020s - Environmental Cost Realities and Global Responses
As we enter the 2020s, the environmental costs of deforestation are becoming even more important, and the drive for sustainability is accelerating in many parts of the world, but the emphasis on economic growth is still causing environmental destruction in many countries.

In the Amazon region of Brazil, 13400 square kilometers per year will be lost by 2021, and 5,000,000 tons of CO₂ will be released into the atmosphere. The associated global warming costs are estimated at $10000000000 but still not accounted for in GDP. The Brazilian government has shown a policy of easing logging due to economic growth, and deforestation is progressing, but at the same time international pressure is intensifying.

In Indonesia, the revenue from palm oil exports will reach approximately $3000000000000 by 2021, supporting economic growth, but the environmental costs of deforestation are not reflected in GDP. emissions from forest fires in 2020 will be about 70,000,000 tons, and methane emissions from the loss of wetlands are accelerating global warming.

In the Congo Basin in Africa, 500,000 hectares of forest are logged annually, emitting 60 million tons of CO₂ each year. While illegal logging and mineral mining are progressing and deforestation is accelerating, NGOs and companies are making efforts, but the long-term environmental cost of the loss of carbon absorption function is not accounted for in GDP.

Costa Rica continues to be recognized as an example of successful environmental protection through the implementation of Green GDP, with 59% forest area in 2022 and annual revenues from ecotourism of $5,000,000. Investments in environmental protection support sustainable economic growth, and plans are underway to achieve carbon neutrality by 2050.

In Japan, Hitachi, Ltd. has advanced its CO₂ reduction technology and achieved an annual reduction of 20,000 tons of CO₂. In addition, Toyota Motor Corporation has entered the electric vehicle (EV) market and announced a policy to eliminate the production of gasoline-powered vehicles by 2035, and so decarbonization is progressing. However, the environmental conservation benefits of corporate efforts are not reflected in GDP, and challenges remain for sustainable development.

Conclusion
Throughout this historical process, the contradiction between deforestation and economic growth has been highlighted. It has become clear that if deforestation proceeds in pursuit of short-term GDP growth without the environmental costs becoming apparent, serious long-term effects such as global ecosystem destruction and accelerated global warming will emerge. In order to achieve sustainable economic development, new economic indicators that take environmental factors into account are needed to assess green GDP and corporate adoption of environmental technologies.