Jamaican deforestation and bauxite mining - The role of negotiations for sustainable resource use

Abstract

Bauxite mining is considered to be one of the most significant reasons behind deforestation in Jamaica. During the last decades, large areas of forest have been cleared on the island due' to open pit mining for bauxite. Because private landowners own the bauxite land, the operating mining companies are in many cases forced to bargain with the private landowners to obtain access to the desired land. Several economic theories present solutions to the problem of sustainable resource use. The purpose of this paper is to examine if the Coase theorem can be applied to analyze if the deforestation caused by bauxite mining in Jamaica can be amended towards optimal resource management. The paper concludes that there exist no practical obstacles for bargaining to take place. However, since the market for bauxite mining is not characterized by perfect competition, an efficient allocation of the Jamaican forests according to the Coase theorem is not achieved. Yet we find that the antiquated Coase theorem can help us gain knowledge into some fundamental aspects of the prevailing market conditions surrounding Jamaican bauxite mining. © 2004 Taylor and Francis.