Thursday, 20 January 2011


The most dedicated of readers may remember this post from our more innocent pre-bailout times, when I noted:

We in Greece do not have to choose between socialism and climate change denial - we believe in nothing and can therefore disbelieve whatever we like.

This was the story of our Minister for Climate Change being told off by our energy unions in a remarkably sub-human way for not being too keen on Brown Coal – our ‘national fuel’ apparently.

Well, she’s in trouble again. She’s come up with an outrageous idea was that it should be illegal to build outside residential zones if they have been included in the Natura programme for the preservation of pristine animal habitats.

Predictably, half the Socialist party pounced on her, citing over-sensitive regulation that will finish off our struggling construction sector, whose output is down 21% from the last year.  This strikes me as odd – construction is down because people don’t have money to invest, because house prices are falling and because banks won’t lend as easily. When demand is the problem, deregulation doesn’t really provide much by way of stimulus. Right?

Even more hilarious is the manner, once again, in which the Minister’s suggestion was dismissed. Giannis Vouros, yet another actor-cum-politician popping his greasy locks above the parapet these days, was hilariously quoted as saying:

'This ecology stuff is all very nice but it should not be allowed to turn into eco-fetishism. We can’t expect [people to] sit and think oh where are the pelicans going to be laying their eggs, and derail an entire development plan’

Even so, my friends.

This is a dilemma for me because I find the case for protecting animal habitats compelling. On the face of it, it is much easier to do this if there are clear land use regulations in place. However, I also believe that the less power the Government has, the better. I’ll suspend judgement until we’ve considered the evidence. I haven’t followed very much of that with regards to degradation of animal habitats, but I know a little about the deforestation literature, which works in a similar way.

The evidence suggests that an area is much more likely to be deforested if the level of prosperity of its inhabitants is high, or if the area is mostly agricultural. This is corroborated by evidence that arson is more likely when GDP per capita rises and fuel and wheat prices increase.

Here’s the trick though: the evidence suggests demand for urban and rural living space did not lead to deforestation. Demand for quality, expensive dwellings, however, did. We know because deforestation grows with GDP per capita but not urban demand and because housing booms correlate with deforestation. If the same holds for habitat destruction, it would explain why the Socialist MPs (rightly) point out that regulation will hit construction – because they are referring to demand from well-to-do citizens who have not been affected by the recession.

Of course, structure also matters. The municipal and public ownership of peri-urban forest certainly made it easier to reclassify for other uses (this is important because illegal land use is not very strongly correlated with deforestation), not least by allowing corrupt officials to facilitate the process. On the other hand, deforestation tended to go down as the number of hotel beds increased. Tourists don’t like fires or wastelands and hoteliers don’t like losing money.

So who’s eating up our forests? Subsidised farmers and demand for land by rich folks – through deforestation and arson. How do we keep them from doing this? By making each forest someone’s livelihood (if you can’t stomach making it someone’s property, which I understand), saying no to farm subsidies and of course fighting corruption at the local level.

Now I wonder if the natura habitats can be protected in a similar way.


  1. http://democracystreet.blogspot.com/2009/08/i-always-felt-little-guilty-about.html


  2. @Simon Planning a new major road encourages arson by guaranteeing a property boom. How do you divorce the property/construction bubble from the road-building (which is frankly a good thing)?


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