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Reduction in the size of the world's remaining rainforests is an issue of huge importance for all societies. This new book - an analysis of the impact of oil wealth on tropical deforestation in South America, Africa and Asia - takes a much more analytical approach than the usual fare of environmental studies. The focus on economies as a whole leads to a more balanced view than those that are often put forward and therefore, vitally, a view that is more valid. Of use to those who study environmental issues and economics, this book is potentially an indispensable tool for policy-makers the world over.

Land-use change and deforestation in Latin America generally, and in the Amazon Basin specifically, are driven primarily by economic profitability (agricultural expansion and logging) and governance weaknesses (notably, lenient law enforcement), and only to a much lesser extent by deterministic poverty cycles. Nevertheless, poor forest dwellers (indigenous communities, smallholders, rubber tappers) have the potential to be important stakeholders in stabilizing Amazonian land use. Changing incentives for big deforestation actors will likely have indirect effects also on these poor people, to the extent that they might gain or lose from deforesting and degrading activities. Large-scale strategies to reduce emissions from deforestation and degradation will thus require social impact assessments that account for leakage and perverse incentive scenarios. Latin America has been a pioneer in testing and implementing PES ('Payments for environmental services') schemes in developing countries, and these experiences are of high value to regional REDD ('Reducing emissions from deforestation and forest degradation') policy design. However, ideological resistance against PES/REDD in Amazonia also exists due to fears that such schemes will lead to the loss of land rights or of sovereignty. In these situations, intermediaries whom both service buyers and sellers trust can play an important role in mediating and catalyzing initiatives. In addition, a significant share of deforestation in the Amazon (and in other tropical forest frontiers) happens through private illegal, but often tolerated, occupation and clearing of government-owned forestlands. This type of deforestation cannot be stopped through landowner payments of the PES type since there are no legitimate landowners available to compensate for their conservation efforts.

How much do poor rural households rely on environmental extraction from natural ecosystems? And how does climate variability impact their livelihoods? This paper sheds light on these two questions with household income data from the Poverty and Environment Network pantropical data set, combined with climate data for the past three decades. The study finds that extraction of wild resources (from natural forests, bushlands, fallows, etc.) provides on average as much income (about 27 percent) as crops across the smallholder sample. The cross-section data on past reactions to household self-perceived economic shocks and observed production reactions to climate anomalies can, respectively, provide hints about livelihood vulnerability to current climate variability, which is likely to worsen with climate change. Forest extraction did not figure among the most favored response strategies to households' self-perceived economic shocks, but households undertake subtle substitutions in sector production in response to weather anomalies that accentuate suboptimal climatic conditions for cropping. By relying more on forest extraction and wages, households compensate quite successfully for declining crop incomes. This paints a cautiously optimistic picture about fairly flexible rural livelihood reactions to current climate variability, and featuring forests as potentially important in household coping strategies.