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GTAP Resource #4612

by Silva, Jonathan, Joaquim Bento Ferreira-Filho and Mark Horridge

This paper analyzes the economic impacts of freezing deforestation in the Brazilian Amazon, through the use of a dynamic computable general equilibrium (CGE) model extended for handling land-use changes and its GHG emissions. This model uses observed data to represent emissions and land use through transition matrices, calibrated with satellite imagery provided by the Brazilian National Institute for Space Research. The policy considers halting new land supply, which is justified by the international efforts to control deforestation around the world, as established by the New York Declaration on Forests, issued in the United Nations Climate Summit 2014. Furthermore, the implemented policy goes beyond the current domestic goals, which established reducing deforestation in the Legal Amazon region by 80% by 2020, in relation to the average recorded in 1996-2005. The extreme policy deals with a very restricted scenario, considering the high costs and limitations involved for the agents, which may facilitate the design and implementation of intermediate policy scenarios. Besides, zero deforestation although extreme, is feasible, since the clearing of new areas has been successfully curbed in Brazil over the past few years. The main results show that deforestation control focused on the Amazon Biome can effectively reduce domestic GHG emissions, although some sinks may occur as a result of the displacement of deforestation to other regions and biomes. Such movement has another major implication, namely, that of enhancing regional inequalities. Therefore, the asymmetries between the southeast and mid-west regions were intensified, especially in the latter, where negative impacts on the regional GDP, consumption levels, employment, and other macroeconomic variables were quite pronounced, as expected. Finally, a promising approach to be evaluated in future research was identified, that of productivity gains in agriculture, as alternative for deforestation control. ...

Resource Details (Export Citation) GTAP Keywords
Category: Other CGE Application
Status: Not published
Date: 2015
Created: Silva, J. (3/28/2015)
Updated: Batta, G. (6/24/2015)
Visits: 1,704
- Dynamic modeling
- Climate change policy
- Land use
- South America

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