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Performance-based renewal conditions for tropical forest concessions provide a powerful incentive for loggers to adopt reduced-impact logging practices and to comply with minimum-diameter cutting limits - even with short concession agreements. In government-owned tropical forests, timber is often harvested under concession agreements with private logging companies. Forestry departments typically impose logging regulations to minimize the negative environmental impacts of logging, but logging practices throughout the tropics appear to be undermining the sustainability of timber and nontimber benefits from tropical forests. Boscolo and Vincent use bioeconomic simulations to test the empirical significance of several common recommendations for promoting better logging practices in tropical forests. They find that: * Because of the effects of discounting, longer concessions give loggers little incentive to adopt reduced-impact logging or to comply with minimum-diameter cutting limits. * Royalties can be used to encourage compliance with minimum-diameter cutting limits but discourage the adoption of reduced-impact logging. And per tree royalties, which encourage compliance with minimum-diameter cutting limits, tend to be less effective as revenue instruments. * Relatively small performance bonds can be used to induce loggers to adopt reduced-impact logging, but very large bonds are needed to induce compliance with minimum-diameter cutting limits. * Reduced-impact logging and minimum-diameter cutting limits both have significant positive effects on environmental indicators, but these benefits come at the cost of a substantial reduction in the timber value of the stand. * Performance-based renewal conditions provide a powerful incentive for loggers to adopt reduced-impact logging and to comply with minimum-diameter cutting limits - even with short concession agreements. * Performance-based renewal conditions sharply reduce the size of the performance bond needed to induce compliance with minimum-diameter cutting limits. Royalties, but not area charges, have a similar, although weaker, effect. The authors' results also suggest that a cause of premature reentry into logged forests is minimum-diameter cutting limits that exceed minimum commercial log diameters, combined with weak control over access to logged-over forests. This paper-a product of the Development Research Group-is part of a larger effort in the group to elucidate the economics of conservation policies. Marco Boscolo may be contacted at mboscolo@hiid.edu.

Logging --- Environmental aspects.

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Logging --- Forest resources --- Harvesters --- work organization --- Economic analysis

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Geophysical well logging --- Hazardous waste sites --- Groundwater --- Pollution

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Forest roads --- Forest reserves --- Logging --- Government policy --- Management.

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Goshawk --- Logging trucks --- Effect of noise on --- Noise --- Environmental aspects