The Road to Growth: Measuring the Tradeoffs between Economic Growth and Ecological Destruction

Roads bring significant economic benefits that are vital for development. But they are often also the precursors to deforestation and other adverse environmental impacts. This paper examines the road-induced tradeoffs between economic growth, deforestation, and biodiversity loss in the Democratic Republic of Congo (DRC). Decades of conflict have left the DRC's transport infrastructure among the sparsest and most dilapidated in the world. Most of the provincial capitals are unconnected to the capital city, and improving road connectivity could lead to a significant boost in trade and economic growth. At the same time the DRC is also home to the second largest rainforest in the world. The iconic Congo forests are a trove of ecological value-some monetizable and most that is not. So the destruction of the DRC's forests will have significant environmental ramifications. We provide empirical estimates of the economic benefits of improving market access and reducing transportation costs. We then estimate a forest destruction function to assess the impact that new or improved roads have on forest clearing. In addition, a novel biodiversity index is developed to identify forests of high biodiversity significance. Two simulations are performed to quantitatively demonstrate the impacts of road improvement projects in terms of increased GDP, forest loss, and biodiversity that are put at risk. To our knowledge, this is the first study to jointly examine the economic benefits and ecological risks to infrastructure investments. It is envisioned that the methods employed here can be used to guide future infrastructure investments toward designs which have a large economic impact while minimizing ecological risks.