Jamaican Deforestation and Bauxite Mining
-Applying the Coase theorem

Abstract: In Jamaica, bauxite mining is considered to be one of the most significant
reasons behind deforestation. Within the last few decades, large areas of
forest have been cleared on the island due to the open pit mining for
bauxite. Because the bauxite land in many cases is owned by private
landowners, the operating mining companies are forced to bargain with them
to get access to the desired land. The purpose of this thesis is to analyze
if the Coase theorem about optimal resource management through bargaining
can be applied to the Jamaican deforestation problem caused by bauxite
mining. The study was performed by interviews and observations and focus
was turned to the hills of the Mocho Mountains in the parish of Clarendon.
The conclusion is that there existed no practical obstacles for bargain to
take place. However, since the market for bauxite mining is not
characterized by perfect competition, an efficient allocation of the
Jamaican forests is not achieved.