IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v11y2009i4p244-252.html
   My bibliography  Save this article

A computable general equilibrium analysis of forest concessions in Brazil

Author

Listed:
  • Banerjee, Onil
  • Alavalapati, Janaki

Abstract

The management of natural forests in Brazil is concentrated in the states of the Legal Amazon with almost all legal timber extraction occurring on private land. While the government has historically promoted the development of forest plantations through economic incentives, state involvement with natural forests has focused on regulation. Over 1 million km² in the Legal Amazon have been identified as suitable for the production of forest goods and services and other resource-based activities (Veríssimo et al., 2000, p. 6). Only recently, however, has the state taken action to harness the potential this vast public resource holds for promoting sustainable development. In March 2006, the Public Forest Management Law was passed by the government of President Luiz Inácio Lula da Silva. A key feature of this law is a framework for creating forest concessions on public lands. With the goal of establishing up to 13 million ha of forest concessions by the end of the decade, such an initiative for the development of the forest sector is unprecedented in Brazilian history, marking the state's recognition of the Amazon's vocation as one of forest-based development. A static computable general equilibrium (CGE) model is developed to evaluate the short-run socio-economic and environmental implications of implementing forest concessions in the Brazilian Amazon. Results indicate that household income and private consumption increase with the implementation of forest concessions. With the expansion of natural forest management in the north, forest plantations contract significantly in all regions and to a lesser degree, natural forest management in the north east and center west. As forest plantations demand less agricultural land for production, the price of agricultural land decreases and the excess supply is taken up by the agricultural sector which pays less for the land and consequently produces more of a less expensive product. The implementation of forest concessions results in a 3.8% increase in legal deforestation with the largest increase in the north, followed by the north east and center west.

Suggested Citation

  • Banerjee, Onil & Alavalapati, Janaki, 2009. "A computable general equilibrium analysis of forest concessions in Brazil," Forest Policy and Economics, Elsevier, vol. 11(4), pages 244-252, July.
    • Handle: RePEc:eee:forpol:v:11:y:2009:i:4:p:244-252
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389-9341(09)00046-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Persson, Annika & Munasinghe, Mohan, 1995. "Natural Resource Management and Economywide Policies in Costa Rica: A Computable General Equilibrium (CGE) Modeling Approach," The World Bank Economic Review, World Bank, vol. 9(2), pages 259-285, May.
    2. Andrea Cattaneo, 2001. "Deforestation in the Brazilian Amazon: Comparing the Impacts of Macroeconomic Shocks, Land Tenure, and Technological Change," Land Economics, University of Wisconsin Press, vol. 77(2), pages 219-240.
    3. Wiebelt, Manfred, 1994. "Protecting Brazil's tropical forest: a CGE analysis of macroeconomic, sectoral, and regional policies," Kiel Working Papers 638, Kiel Institute for the World Economy (IfW Kiel).
    4. Octávio Augusto Fontes Tourinho & Napoleão Luiz Costa da Silva & Yann Le Boulluec Alves, 2006. "Uma matriz de contabilidade social para o Brasil em 2003," Discussion Papers 1242, Instituto de Pesquisa Econômica Aplicada - IPEA.
    5. Gan, Jianbang, 2004. "Effects of China's WTO accession on global forest product trade," Forest Policy and Economics, Elsevier, vol. 6(6), pages 509-519, October.
    6. Cattaneo, Andrea, 2002. "Balancing agricultural development and deforestation in the Brazilian Amazon:," Research reports 129, International Food Policy Research Institute (IFPRI).
    7. Christian M. Dufournaud & Michael Jerrett & CJohn T. Quinn & Virginia Maclaren, 2000. "Economy-Wide Effects of Forest Policies: A General Equilibrium Assessment from Vietnam," Land Economics, University of Wisconsin Press, vol. 76(1), pages 15-27.
    8. Nabil Annabi & John Cockburn & Bernard Decaluwé, 2006. "Functional Forms and Parametrization of CGE Models," Working Papers MPIA 2006-04, PEP-MPIA.
    9. Stenberg, Luz Centeno & Siriwardana, Mahinda, 2007. "Forest conservation in the Philippines: An economic assessment of selected policy responses using a computable general equilibrium model," Forest Policy and Economics, Elsevier, vol. 9(6), pages 671-693, February.
    10. Bandara, Jayatilleke S, 1991. "Computable General Equilibrium Models for Development Policy Analysis in LDCs," Journal of Economic Surveys, Wiley Blackwell, vol. 5(1), pages 3-69.
    11. Beutre, Benjamin & Rodriguez, Gil & Pant, Hom M., 2003. "Data issues in general equilibrium modelling," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57838, Australian Agricultural and Resource Economics Society.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Onil Banerjee & Martin Cicowiez & Mark Horridge & Renato Vargas, 2016. "A Conceptual Framework for Integrated Economic-Environmental Modelling," CEDLAS, Working Papers 0202, CEDLAS, Universidad Nacional de La Plata.
    2. Kirsten A Henderson & Madhur Anand & Chris T Bauch, 2013. "Carrot or Stick? Modelling How Landowner Behavioural Responses Can Cause Incentive-Based Forest Governance to Backfire," PLOS ONE, Public Library of Science, vol. 8(10), pages 1-13, October.
    3. Withey, P. & Lantz, V.A. & Ochuodho, T. & Patriquin, M.N. & Wilson, J. & Kennedy, M., 2018. "Economic impacts of conservation area strategies in Alberta, Canada: A CGE model analysis," Journal of Forest Economics, Elsevier, vol. 33(C), pages 33-40.
    4. Lantz, Van & McMonagle, Galen & Hennigar, Chris & Sharma, Chinmay & Withey, Patrick & Ochuodho, Thomas, 2022. "Forest succession, management and the economy under a changing climate: Coupling economic and forest management models to assess impacts and adaptation options," Forest Policy and Economics, Elsevier, vol. 142(C).
    5. Malahayati, Marissa & Masui, Toshihiko, 2019. "The impact of green house gas mitigation policy for land use and the forestry sector in Indonesia: Applying the computable general equilibrium model," Forest Policy and Economics, Elsevier, vol. 109(C).
    6. Banerjee, Onil & Alavalapati, Janaki R.R. & Lima, Eirivelthon, 2016. "A framework for ex-ante analysis of public investment in forest-based development: An application to the Brazilian Amazon," Forest Policy and Economics, Elsevier, vol. 73(C), pages 204-214.
    7. Ochuodho, T.O. & Lantz, V.A. & Lloyd-Smith, P. & Benitez, P., 2012. "Regional economic impacts of climate change and adaptation in Canadian forests: A CGE modeling analysis," Forest Policy and Economics, Elsevier, vol. 25(C), pages 100-112.
    8. Rafael Henrique Mainardes Ferreira & Claudia Tania Picinin, 2018. "Bibliometric analysis for characterization of oil production in Brazilian territory," Scientometrics, Springer;Akadémiai Kiadó, vol. 116(3), pages 1945-1974, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Banerjee, Onil & Alavalapati, Janaki R.R. & Lima, Eirivelthon, 2016. "A framework for ex-ante analysis of public investment in forest-based development: An application to the Brazilian Amazon," Forest Policy and Economics, Elsevier, vol. 73(C), pages 204-214.
    2. Banerjee, Onil & Alavalapati, Janaki, 2010. "Illicit exploitation of natural resources: The forest concessions in Brazil," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 488-504, July.
    3. Pattanayak Subhrendu K. & Ross Martin T. & Depro Brooks M. & Bauch Simone C. & Timmins Christopher & Wendland Kelly J. & Alger Keith, 2009. "Climate Change and Conservation in Brazil: CGE Evaluation of Health and Wealth Impacts," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(2), pages 1-44, September.
    4. Onil Banerjee & Martin Cicowiez & Mark Horridge & Renato Vargas, 2016. "A Conceptual Framework for Integrated Economic-Environmental Modelling," CEDLAS, Working Papers 0202, CEDLAS, Universidad Nacional de La Plata.
    5. World Bank, 2005. "Development Policy Lending and Forest Outcomes : Influences, Interactions, and Due Diligence," World Bank Publications - Reports 8288, The World Bank Group.
    6. Chris D. Arnot & Martin K. Luckert & Peter C. Boxall, 2011. "What Is Tenure Security? Conceptual Implications for Empirical Analysis," Land Economics, University of Wisconsin Press, vol. 87(2), pages 297-311.
    7. Haider A. Khan, 2007. "Social Accounting Matrix: A Very Short Introduction for Economic Modeling," CIRJE F-Series CIRJE-F-477, CIRJE, Faculty of Economics, University of Tokyo.
    8. Botero-García, Jesús Alonso, 2012. "Desempleo e informalidad en Colombia : un análisis de equilibrio general computable," Chapters, in: Arango-Thomas, Luis Eduardo & Hamann-Salcedo, Franz Alonso (ed.), El mercado de trabajo en Colombia : hechos, tendencias e instituciones, chapter 19, pages 795-839, Banco de la Republica de Colombia.
    9. Kebede, Sindu & Fekadu, Belay & Aredo, Dejene, 2011. "Trade Liberalization and Poverty: A Macro-Micro Analysis in Ethiopia," Proceedings of the German Development Economics Conference, Berlin 2011 44, Verein für Socialpolitik, Research Committee Development Economics.
    10. Withey, P. & Lantz, V.A. & Ochuodho, T. & Patriquin, M.N. & Wilson, J. & Kennedy, M., 2018. "Economic impacts of conservation area strategies in Alberta, Canada: A CGE model analysis," Journal of Forest Economics, Elsevier, vol. 33(C), pages 33-40.
    11. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    12. Adams, Philip D. & Dixon, Peter B., 1997. "Generating detailed commodity forecasts from a computable general equilibrium model," International Journal of Forecasting, Elsevier, vol. 13(2), pages 223-236, June.
    13. Centeno, Maria Luz N., 2000. "Deforestation In The Philippines: A Cge Modelling Approach," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123619, Australian Agricultural and Resource Economics Society.
    14. Muhammad, Andrew & Jones, Keithly G., 2021. "The end of the trade war? Effects of tariff exclusions on U.S. forest products in China," Forest Policy and Economics, Elsevier, vol. 122(C).
    15. Zhai, Fan, 2008. "Armington Meets Melitz: Introducing Firm Heterogeneity in a Global CGE Model of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 575-604.
    16. Renato Vargas & Pamela Escobar & Maynor Cabrera & Javier Cabrera & Violeta Hernández & Vivian Guzmán & Martin Cicowiez, 2017. "Climate risk and food security in Guatemala," Working Papers MPIA 2017-01, PEP-MPIA.
    17. Tchouamou Njoya, Eric, 2020. "An analysis of the tourism and wider economic impacts of price-reducing reforms in air transport services in Egypt," Research in Transportation Economics, Elsevier, vol. 79(C).
    18. Antinori, Camille M. & Rausser, Gordon C., 2003. "Does Community Involvement Matter? How Collective Choice Affects Forests in Mexico," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt83j385n0, Department of Agricultural & Resource Economics, UC Berkeley.
    19. Muller, Daniel & Zeller, Manfred, 2002. "Land use dynamics in the central highlands of Vietnam: a spatial model combining village survey data with satellite imagery interpretation," Agricultural Economics, Blackwell, vol. 27(3), pages 333-354, November.
    20. Banerjee, Onil & Cicowiez, Martin & Gachot, Sébastien, 2015. "A quantitative framework for assessing public investment in tourism – An application to Haiti," Tourism Management, Elsevier, vol. 51(C), pages 157-173.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:11:y:2009:i:4:p:244-252. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.