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GTAP Resource #7234

"Unbalanced productivity growth and deforestation: a macroeconomic perspective in Brazils Legal Amazon"
by Ferreira-Filho, Joaquim Bento and Marek Hanusch

Despite policy efforts in recent decades, deforestation remains a pervasive phenomenon in Brazil. Yet deforestation is not only affected by forest governance. It is also driven by global demand for commodities and the relative competitiveness of agriculture, which in turn depends on macroeconomic factors impacting product and factor prices. These macroeconomic mechanisms remain largely unexplored. This paper explores the role of the economic productivity in shaping deforestation. It uses an economic model with an empirically founded land use extension to study the macro-structural drivers of land use patterns in Brazil’s Legal Amazon. It demonstrates that productivity gains in the Legal Amazon’s agricultural sector raise deforestation while such gains in non-land intensive sectors (such as manufacturing) reduce deforestation by attenuating the relative competitiveness of agriculture. Higher productivity in other parts of Brazil also reduce incentives for forest conversion in the Legal Amazon. The paper points to the economic forces that forest protection efforts need to counter, while calling for complementary structural reforms to overcome “Brazilian disease” in the longer-term: addressing the legacy of Import Substitution Industrialization and moving up the value chain will shift economic drivers beyond commodities, thus also reconciling development with standing forests.

Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Created: Ferreira-Filho, J. (4/13/2024)
Updated: Ferreira-Filho, J. (4/13/2024)
Visits: 67
- Environmental policies
- Land use
- Agricultural policies
- Economic development
- South America

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