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Deforestation slowdown in the Brazilian Amazon: prices or policies?

Published online by Cambridge University Press:  18 February 2015

Juliano Assunção ,
Clarissa Gandour  and
Rudi Rocha
Juliano Assunção
Affiliation:
Climate Policy Initiative & Núcleo de Avaliação de Políticas Climáticas da PUC-Rio; and Department of Economics, PUC-Rio, Brazil. E-mail: [email protected]
Clarissa Gandour
Affiliation:
Climate Policy Initiative & Núcleo de Avaliação de Políticas Climáticas da PUC-Rio; Estrada da Gávea 50, 4° andar, Gávea, Rio de Janeiro, RJ 22451–263, Brazil. Tel: +55 (21) 3527 2520. E-mail: [email protected]
Rudi Rocha
Affiliation:
Universidade Federal do Rio de Janeiro, Brazil. E-mail: [email protected]
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Abstract

This paper investigates the contribution of agricultural output prices and policies to the reduction in Amazon deforestation in the 2000s. Based on a panel of Amazon municipalities from 2002 through 2009, we first show that deforestation responded to agricultural output prices. After controlling for price effects, we find that conservation policies implemented beginning in 2004 and 2008 significantly contributed to the curbing of deforestation. Counterfactual simulations suggest that conservation policies avoided approximately 73,000 km2 of deforestation, or 56 per cent of total forest clearings that would have occurred from 2005 through 2009 had the policies adopted beginning in 2004 and 2008 not been introduced. This is equivalent to an avoided loss of 2.7 billion tonnes of stored carbon dioxide.

Type
Research Article
Information
Environment and Development Economics , Volume 20 , Issue 6 , December 2015 , pp. 697 - 722
Copyright
Copyright © Cambridge University Press 2015 

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