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The Cost of Forest Preservation in the Brazilian Amazon: The "Arc of Deforestation"

Author

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  • Silva, Felipe de Figueiredo
  • Fulginiti, Lilyan E.
  • Perrin, Richard K.

Abstract

We estimate the trade-off between agricultural production and forest preservation for the municipalities in Brazil's agricultural frontier, the so-called 'arc of deforestation,' using census and deforestation data for 2006. We use a nonparametric directional output distance function that allows us to identify the gradients of the production possibility frontier, which are the trade-offs of interest. We found that, on average, $979 is forgone in annual livestock, timber, and grain revenues to conserve 1 hectare of forest. This translates, ceteris paribus, to an average present value of costs to permanently sequester CO2 of $16.36/t, higher than most previous estimates.

Suggested Citation

  • Silva, Felipe de Figueiredo & Fulginiti, Lilyan E. & Perrin, Richard K., 2019. "The Cost of Forest Preservation in the Brazilian Amazon: The "Arc of Deforestation"," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 44(3), September.
    • Handle: RePEc:ags:jlaare:292328
    DOI: 10.22004/ag.econ.292328
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    Cited by:

    1. Pinto, Bruno Chaves Morone & Fulginiti, Lilyan E. & Perrin, Richard K., 2022. "Tradeoff Between Irrigated Land Area And Counties’ Revenues In The High Plains Aquifer," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322391, Agricultural and Applied Economics Association.
    2. Karanfil, Fatih & Pierru, Axel, 2021. "The opportunity cost of domestic oil consumption for an oil exporter: Illustration for Saudi Arabia," Energy Economics, Elsevier, vol. 96(C).

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