François Libois (PSE)

François Libois
Paris School of Economics, PSE

Abstract

Can historical extractive industries increase natural capital over the long run? This paper demonstrates that pre-industrial metallurgy in Belgium had lasting positive effects on forest and biodiversity conservation. Using newly assembled spatially geolocated data on eighteenth-century forges and forests, combined with contemporary high-resolution forest records, we show that areas near forges exhibit significantly higher old-growth and more biodiverse forest cover today. Results hold on when instrumenting forge presence by the interaction between access to water and proximity to iron deposits. We further explore mechanisms explaining this counterintuitive finding by presenting evidence that blacksmiths secured access to charcoal supplies by purchasing forest land - particularly in areas with high transportation costs. Today, these areas exhibit less land ownership fragmentation, suggesting persistent land concentration. Our analysis reveals how charcoal-dependent industries, through their reliance on localized forest inputs, unintentionally preserved forest cover and dampened later conversion pressures, even long after the shift to coal. More broadly, these findings illustrate the potential for renewable resource-dependent production systems to create enduring path dependencies reshaping environmental landscapes for centuries.