Assessing Forest Conservation for Finland: An ARDL-Based Evaluation

Abstract

Deforestation is a central topic in the ongoing environmental degradation stemming from global economic expansion and population growth. This study delved into the effects of electricity production from renewable sources, GDP per capita, and urbanization on forest area growth in Finland during the over-three-decade research period, 1990–2022, using an Autoregressive Distributed Lag (ARDL) model. Both the ARDL bounds test and the Bayer–Hanck cointegration tests proved the existence of a long-term cointegrating relationship between the variables, and the constructed error correction model (ECM) evaluated short-term relationships. The results showed that: (i) forest area growth is positively connected with electricity production from renewable sources and urbanization; (ii) forest area growth is negatively connected with economic growth; (iii) in the short run, forest area growth is positively connected with all regressors. The utilized ARDL-ECM model, characterized by its robustness and appropriateness, validated the time-series dynamics. The obtained results were scrutinized, and their policy implications were thoroughly examined. Additionally, recommendations are provided to ensure the sustainability and success of forest conservation efforts.