Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide and threatens the world's most diverse ecosystems. Failure to take into account (and adjust) the extraction incentives of local politicians and bureaucrats is likely to render ineffective efforts to conserve the last great areas of tropical forest in the world.

What can be done to combine the need for growth with environmental constraints? This column argues that what is needed is to reconcile developing countries’ urgent need for rapid growth and poverty alleviation with the need to avoid irreversible and costly environmental damage.