The Dynamics Of Deforestation And Economic Growth In The Brazilian Amazon

A multi-disciplinary team of authors analyze the economics of Brazilian deforestation using a large data set of ecological and economic variables. They survey the most up to date work in this field and present their own dynamic and spatial econometric analysis based on municipality level panel data spanning the entire Brazilian Amazon from 1970 to 1996. By observing the dynamics of land use change over such a long period the team is able to provide quantitative estimates of the long-run economic costs and benefits of both land clearing and government policies such as road building. The authors find that some government policies, such as road paving in already highly settled areas, are beneficial both for economic development and for the preservation of forest, while other policies, such as the construction of unpaved roads through virgin areas, stimulate wasteful land uses to the detriment of both economic growth and forest cover.

Annotation This title studies the role of cattle ranching its dynamic and profitability in the expansion of deforestation in Brazilian Amazonia. It provides a social evaluation of deforestation in this region and presents and compares a number of different scenarios and proposed recommendations.

A multi-disciplinary team of authors analyze the economics of Brazilian deforestation using a large data set of ecological and economic variables. They survey the most up to date work in this field and present their own dynamic and spatial econometric analysis based on municipality level panel data spanning the entire Brazilian Amazon from 1970 to 1996. By observing the dynamics of land use change over such a long period the team is able to provide quantitative estimates of the long-run economic costs and benefits of both land clearing and government policies such as road building. The authors find that some government policies, such as road paving in already highly settled areas, are beneficial both for economic development and for the preservation of forest, while other policies, such as the construction of unpaved roads through virgin areas, stimulate wasteful land uses to the detriment of both economic growth and forest cover.

Since the 1970s, federal policies promoting migration and encouraging agricultural development of large farms, logging, and ranching have led to the deforestation of vast areas of the Amazon rainforest.Though these policies have largely been replaced, deforestation continues. What effects do current macroeconomic and regional policies and events have on deforestation and on the well-being of settlers on the agricultural frontier? This report identifies the links between the agriculture and logging sectors in the Amazon, economic growth, poverty alleviation, and natural resource degradation in the region and in Brazil as a whole.It considers the effects of currency devaluation, building roads and other infrastructure in the Amazon, property rights, adoption of technological change, and fiscal incentives and disincentives to deforest.The results are sometimes counterintuitive, but shed new light on why slowing deforestation is so difficult and on the trade-offs between environmental and economic goals.

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"This report suggests that, in contrast to the 1970s and 1980s when occupation of Brazilian Amazonia was largely induced by government policies and subsidies, recent deforestation in significant parts of the region is basically caused by medium- and large-scale cattle ranching. Following a private rationale, the dynamics of the occupation process gradually became autonomous. Among the causes of the transformation are technological and managerial changes and the adaptation of cattle ranching to the geo-ecological conditions of eastern Amazonia which allowed for productivity gains and cost reductions. The fact that cattle ranching is viable from the private perspective does not mean that the activity is socially desirable nor environmentally sustainable. Private gains need to be contrasted with the environmental (social) costs associated with cattle ranching and deforestation. It also is legitimate to argue that the private benefits from large-scale cattle ranching are largely exclusive, having contributed little to alleviate social and economic inequalities. However, decreases in the price of beef in national markets and increases in exports caused by the expansion of cattle ranching in Eastern Amazonia may imply social benefits that go beyond sectoral and regional boundaries." --Résumé de l'éditeur.

Over the past decade, the Brazilian government has actively promoted oil palm in the Amazon biome as an alternative biodiesel feedstock to soy. Because of oil palm’s comparatively high productivity, it places less demand on land than soy and could thereby contribute to reducing pressure on the Amazonian forest. Although oil palm has long been a leading driver of deforestation and social conflict in major producer countries in Southeast Asia, the Brazilian government has put in place a number of mechanisms to ensure oil palm is cultivated sustainably and the sector is inclusive of the rural poor. Through research conducted in Brazil’s leading palm oil producing state of Pará, this paper analyzes the evolution and dynamics of the Brazilian palm oil value chain and the economic, environmental and social challenges faced by the sector. In so doing, it shows that under the right institutional and regulatory conditions, the palm oil sector can expand sustainably and inclusively within forested ecosystems. This though translates into considerably higher production costs for producers, thus undermining the international competitiveness of the Brazilian palm oil sector.