Effect of Economic and Environmental Policies on the Mangrove Economy: A General Equilibrium Framework

This article attempts to provide a theoretical model of a small local mangrove economy. The structure of the model is based on observations from a qualitative field survey conducted in the Sunderbans region of West Bengal. The study showed that fishery is the primary source of income in this region. Agriculture is practised by many, but due to soil salinity, the sector, at best, provides sustenance for the family. Most of the other requirements are met from goods bought from outside. The role of the forest cover on shrimp cultivation is captured through the productivity effect, which increases the output per unit of labour and capital. In this structure, an optimum tariff on the timber industry is derived, and it is shown that the optimum tariff depends on the intensity of the productivity effect.