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GTAP Resource #6851

"AN ECONOMIC EVALUATION OF THE LOW CARBON AGRICULTURE CREDIT PROGRAM IN BRAZIL"
by Ferreira-Filho, Joaquim Bento


Abstract
This paper evaluates the impacts of the ABC program investments in the period 2010-2020, using a CGE model of Brazil (the TERM-BR model), with a detailed inter-regional representation. The TERM-BR model is a dynamic, inter-regional and bottom-up model of Brazil that has as particular features a land use module and an emissions module, which tracks emissions in the whole economy. As an original theoretical and empirical development, this model also tracks carbon accumulation in soils (SOC) due to pasture recovery, as proposed by Stocco et al (2020).
We observed the evolution of pasture area, of degraded pasture area recovered, and the amount of rural credit used in the ABC Program for pasture recovery, for two scenarios. The information on land use (pasture) was obtained from satellite imagery while the information on credit was from the Brazilian Rural Credit and Proagro Operations System (SICOR. Detailed maps of land use and credit contracts were created and combined, with a geographical detail (municipal level). The analysis was conducted both for the total observed pasture recovery areas in Brazil, and for the ABC credit program areas only.
Results show that degraded pastures recovery in Brazil caused a 0,31% in GDP in SCEN1, and 0.07% in SCEN2. To put this value into perspective, the total amount invested by the ABC Program in pasture recovery was R$8,131.6 million in the period 2010-2020. For SCEN2 it is possible to calculate the social return of the ABC Program. Each R$1 invested by the ABC Program in pasture recovery returned R$0.56 to the Brazilian economy, a social return rate of 56% in the period. On average, the return would have been 6.54% per year, in real terms. These data illustrate the importance of productivity increases for the economy, as well as of the investments that allow this increase. We show that the gains from pasture recovery estimated in this study are comparable with other important sectoral policies in Brazil.



Resource Details (Export Citation) GTAP Keywords
Category: 2023 Conference Paper
Status: Not published
By/In: Presented during the 26th Annual Conference on Global Economic Analysis (Bordeaux, France)
Date: 2022
Version:
Created: Ferreira-Filho, J. (4/11/2023)
Updated: Ferreira-Filho, J. (4/11/2023)
Visits: 280
- Dynamic modeling
- Environmental policies
- Land use
- Agricultural policies
- South America


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