The unintended consequences of production bans: the case of the 2018 Kenya logging moratorium

Abstract

Production bans are a common way for governments to address issues of social concern. However, when consumer demand for banned items is insensitive to price changes, cross-border trade may undermine these efforts. We examine the effects of Kenya's 2018 moratorium on the extraction of wood products, including logs and charcoal, from public and community forests. The data show an immediate 36% increase in the domestic charcoal price in Kenya, where over 80% of consumers use it as their primary energy source. Subsequently, we document an increase of 133\% percent in charcoal imports from Uganda to Kenya during the first 6 months of the ban. Further, we estimate that avoided deforestation in Kenya was likely displaced to Uganda such that net carbon emissions increased. These findings demonstrate the ineffectiveness of the ban as a mechanism to decrease greenhouse gas emissions and biodiversity loss from deforestation.