Do forest permits cause deforestation in Indonesia?

SUMMARY Deforestation is the most critical issue of climate change in Indonesia, as well as in other tropical countries, meanwhile major forests is managed under concession or permit system. This paper investigates the effect of forest permits on deforestation in Indonesia. Two major forest permits are taken into analysis, resulting that logging permit is insignificantly correlated to forest cover loss, whereas plantation conversion permit diminishes more forest cover in Indonesia. These results pose a question on the effectiveness of the current forest moratorium policy as well as the forest tariff policy to the attempts in mitigating deforestation. At the end, this paper summarises possible alternative forest policies derived from the empirical findings, from both short and long term perspectives.