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Efficient Forestation in the Brazilian Amazon: Evidence from a Dynamic Model

Author

Listed:
  • Araujo, Rafael
  • Costa, Francisco J M

    (FGV EPGE Brazilian School of Economics and Finance)

  • Sant'Anna, Marcelo
Abstract
This paper estimates the Brazilian Amazon’s efficient forestation level. We propose a dynamic discrete choice model of land use and estimate it using a remote sensing panel with land use and stock of carbon of 5.7 billion pixels, at 30 meters resolution, between 2008 and 2017. We estimate that a business as usual scenario will generate an inefficient loss of 1,075,000 km2 of forest cover in the long run, an area almost two times the size of France, implying the release of 44 billion tons of CO2. We quantify the potential of carbon and cattle production taxes to mitigate inefficient deforestation. We find that relatively small carbon taxes can mitigate a substantial part of the inefficient forest loss and emissions, while only very large taxes on cattle production would achieve a similar effect.

Suggested Citation

  • Araujo, Rafael & Costa, Francisco J M & Sant'Anna, Marcelo, 2020. "Efficient Forestation in the Brazilian Amazon: Evidence from a Dynamic Model," SocArXiv 8yfr7, Center for Open Science.
    • Handle: RePEc:osf:socarx:8yfr7
    DOI: 10.31219/osf.io/8yfr7
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    References listed on IDEAS

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    Cited by:

    1. Wibbenmeyer, Matthew & Joiner, Emily & Wear, David N., 2023. "The Economics of Forest Fuel Removals on Federal Lands," RFF Working Paper Series 23-27, Resources for the Future.
    2. Rafael Araujo & Francisco Costa & Teevrat Garg, 2022. "Public Attention and Environmental Action: Evidence from Fires in the Amazon," CESifo Working Paper Series 9897, CESifo.
    3. Araujo, Rafael, 2024. "The value of tropical forests to hydropower," Energy Economics, Elsevier, vol. 129(C).
    4. Harding, Torfinn & Herzberg, Julika & Kuralbayeva, Karlygash, 2021. "Commodity prices and robust environmental regulation: Evidence from deforestation in Brazil," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    5. Wu, Tong & Lawell, C.Y. Cynthia Lin & Just, David R. & Zhao, Jiancheng & Fei, Zhangjun & Wei, Qiang, 2022. "Optimal Forest Management for Interdependent Products: A Nested Dynamic Bioeconomic Model and Application to Bamboo," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322164, Agricultural and Applied Economics Association.
    6. Carreira, Igor & Costa, Francisco & Pessoa, João Paulo, 2024. "The deforestation effects of trade and agricultural productivity in Brazil," Journal of Development Economics, Elsevier, vol. 167(C).

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