UC San Diego

Abstract There is a long-standing debate over whether new roads unavoidably lead to environmental damage, especially forest loss, but causal identification has been elusive. Using multiple causal identification strategies, we study the construction of new rural roads to over 100,000 villages and the upgrading of 10,000 kilometers of national highways in India. The new rural roads had precisely zero effect on local deforestation. In contrast, the highway upgrades caused substantial forest loss, which appears to be driven by increased timber demand along the transportation corridors. In terms of forests, last mile connectivity had a negligible environmental cost, while expansion of major corridors had important environmental impacts.