Boycotting tropical timber reduces its economic value and provides an
incentive to burn down forests, making them available for subsequent
agricultural use or livestock farming. In contrast, a certification
scheme for sustainably produced timber (tropical or non-tropical)
protects the forests by raising their economic value. Examined here the
impact of a certification scheme on German demand for tropical timber. A
partial-equilibrium model is developed for the German tropical timber
market as a whole as well as for five important submarkets representing
50% of the total demand. The results reveal that a credible
certification scheme can induce a significant expansion of demand for
sustainably produced tropical timber. This holds true for a scheme
restricted to Germany as well as for an OECD-wide approach.