The problem of deforestation is similar to the textbook public good problem, whereas myopic economic actors over-exploit resources to a level of extinction. In the case of forests, this problem is even more complex due to limited enforcement capacity in remote forestry areas. Identifying the type of players involved in illegal logging, understanding local communities’ views on illegal logging, and incentivising them to protect the forest is essential to design an effective and not harmful conservation policy.

To identify the effect of conflicts on deforestation, the research uses conflict cell-level analysis to create an “around” dependent variable accounting for the environmental change in the cells surrounding the conflict cell. In addition to revealing the illegal logging-financing mechanism, the study aims to complement the econometric analysis with fieldwork which is necessary to understand how local communities view deforestation and illegal logging by armed groups (e.g. the trade-off between capital inflow and deforestation, and within community conflict of interest). This is important in order to derive concrete policy implications that will not harm local communities and potentially incentivise them to enforce illegal logging.

In contrast to previous papers that investigated the link between armed groups’ activity and deforestation,this research aims to contribute to the existing literature by unpacking the exact transmission mechanism by which conflicts damage the environment: the illegal logging-financing channel using advanced spatial econometric techniques together with international trade data. Additionally, this research seeks to complement the empirical analysis with fieldwork required to propose a community-based conservation policy.