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A framework for ex-ante analysis of public investment in forest-based development: An application to the Brazilian Amazon

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  • Banerjee, Onil
  • Alavalapati, Janaki R.R.
  • Lima, Eirivelthon

Abstract

This paper develops a framework for evaluating the ex-ante economic impacts of public investments in forest-based development. Computable General Equilibrium (CGE) models provide a powerful approach for evaluating public investments in sectors with strong inter-sectoral linkages and for capturing dynamic economy-wide effects. Results of CGE analysis may be analyzed in a social cost-benefit framework typically used by the public sector and multilateral development banks to assess investment viability and trade-offs between alternatives. In this paper, a dynamic CGE is developed to evaluate the impact of a development loan to promote natural forests, forest plantations and agroforestry development in the Amazonian state of Acre, Brazil. Results of the analysis demonstrate the positive impact the expansion forest-based development activities generates and the potential the approach has for comprehensive analysis of the direct, indirect and induced benefits of public forest sector investment.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:forpol:v:73:y:2016:i:c:p:204-214
    DOI: 10.1016/j.forpol.2016.09.008
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    References listed on IDEAS

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    Cited by:

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    2. Santos, Andreia & Carvalho, Ana & Barbosa-Póvoa, Ana Paula & Marques, Alexandra & Amorim, Pedro, 2019. "Assessment and optimization of sustainable forest wood supply chains – A systematic literature review," Forest Policy and Economics, Elsevier, vol. 105(C), pages 112-135.

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