Economic analysis of deforestation reduction in Brazil

Brazil has committed itself to reduce its greenhouse gas (GHG) emissions by 36.1% and 38.9% compared to projected emissions for 2020. In order to accomplish this, the deforestation in the Amazon will have to be reduced by 80% and in the savannah region (Cerrado) by 40% by that year. Concurrently, Brazil is the country with the greatest potential to increase its agricultural production and contribute to the challenge of feeding an increasing world population. Moreover, agribusiness is a key sector of the Brazilian economy for income generation and promotion of foreign exchange. This article discusses the economic impact of a restrictive policy of deforestation on the agricultural and livestock sector and the national economy using a computable general equilibrium model. The results point to low losses in GDP from the limited deforestation scenario as compared with the baseline, but non negligible impacts in the agricultural, livestock and food sector.

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JEL Codes:
Q15; O13; D58

 Record created 2017-04-01, last modified 2020-10-28

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