Foreign capital, forest change and regulatory compliance in Congo Basin forests

Tropical forest change is driven by demand in distant markets. Equally, investments in tropical forest landscapes by capital originating from distant emerging economies are on the rise. Understanding how forest outcomes vary by investment source is therefore becoming increasingly important. We empirically evaluate the relationship between investment source and deforestation from 2000 to 2010 in the Republic of Congo. A Congolese forestry code was implemented in 2000 to mitigate degradation of production forests by standardizing all logging in the country according to sustainable forest management(SFM) guidelines. Following the implementation of this law, the majority(73%) of Congo's production forests were managed by European(40%) and Asian(33%) companies. European concessions had the highest rates of total and core deforestation, followed by Asian concessions, indicating that the fragmentation of intact forests in Congo is strongly associated with industrial logging fueled by foreign capital. European concession holders were also far more likely to comply with SFM policies, followed by Asian concessions, suggesting that compliance with Sustainable Forest Management policies may not mitigate degradation in tropical production forests. Further evaluation of the relationship between investment source, regulatory compliance, and outcomes in tropical countries is essential for effective conservation of tropical forest ecosystems.