Conference Agenda

Can a forest-policy reform deliver both higher economic use and ecological sustainability? This paper studies this question in the context of Finland's mid-2010s forest-policy shift, which combined a deregulation of private forest management with a government strategy that promoted the bioeconomy and increased wood use. I develop a simple forest-harvest framework in which legal constraints and transaction costs affect the private return to cutting, and I test its predictions using satellite-measured annual forest loss near the Finnish-Russian border. The empirical design combines a geographic regression discontinuity with a difference-in-discontinuities strategy, exploiting the sharp jurisdictional break at the border and the timing of the Finnish reform. I then use local private-ownership exposure to decompose the post-reform increase into a Finland-wide government-period component and a private-owner law channel. The results show a clear increase in Finnish-side forest loss after the reform, with the largest effects during 2016-2019. The decomposition indicates that this peak reflects both a broad government-period increase and a private-owner law channel. After the 2019 government change, the common component contracts, while the private-owner channel remains positive and statistically meaningful.