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The pioneer market for forest law compliance in Paragominas, Eastern Brazilian Amazon

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  • Brito, Brenda

Abstract

This paper explores farmers’ motivations to participate in a market mechanism to come into compliance with the forest laws in Brazil. As of July 2008, farmers with deforestation beyond what is legally permitted can choose between compensating for illegal deforestation at another property or restoring this environmental debt in situ. The study analyzes the first real case of such a compensation market in the Amazonia, started in 2014 in the municipality of Paragominas, Pará. I explore the main features of the Paragominas compensation market in order to understand why farmers with forest deficits would opt for such a mechanism. In particular, the main question explored in this study is: what economic and environmental factors influence the choice to compensate rather than restore in properties with a legal reserve deficit in Paragominas? Results show that an increase in the percentage of illegal deforestation that occurred up to 2008 on a property is associated with an increase in the predicted probability of choosing compensation, when keeping agriculture as a land use, the property size, and the number of land uses in the property unchanged. The study also reveals that farmers with forest deficits may prefer to buy a forest area instead of renting for compensation if they have enough capital to invest.

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  • Brito, Brenda, 2020. "The pioneer market for forest law compliance in Paragominas, Eastern Brazilian Amazon," Land Use Policy, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:lauspo:v:94:y:2020:i:c:s0264837718305672
    DOI: 10.1016/j.landusepol.2019.104310
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    References listed on IDEAS

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    1. Mertens, B. & Poccard-Chapuis, R. & Piketty, M. -G. & Lacques, A. -E. & Venturieri, A., 2002. "Crossing spatial analyses and livestock economics to understand deforestation processes in the Brazilian Amazon: the case of Sao Felix do Xingu in South Para," Agricultural Economics, Blackwell, vol. 27(3), pages 269-294, November.
    2. Brenda Brito, 2017. "Potential trajectories of the upcoming forest trading mechanism in Pará State, Brazilian Amazon," PLOS ONE, Public Library of Science, vol. 12(4), pages 1-21, April.
    3. Paula Bernasconi & Stefan Blumentrath & David N Barton & Graciela M Rusch & Ademar R Romeiro, 2016. "Constraining Forest Certificate’s Market to Improve Cost-Effectiveness of Biodiversity Conservation in São Paulo State, Brazil," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-18, October.
    4. Erin O Sills & Diego Herrera & A Justin Kirkpatrick & Amintas Brandão Jr. & Rebecca Dickson & Simon Hall & Subhrendu Pattanayak & David Shoch & Mariana Vedoveto & Luisa Young & Alexander Pfaff, 2015. "Estimating the Impacts of Local Policy Innovation: The Synthetic Control Method Applied to Tropical Deforestation," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-15, July.
    5. Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
    6. Alston, Lee J. & Libecap, Gary D. & Mueller, Bernardo, 2000. "Land Reform Policies, the Sources of Violent Conflict, and Implications for Deforestation in the Brazilian Amazon," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 162-188, March.
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    1. Pinillos, Daniel & Poccard-Chapuis, René & Bianchi, Felix J.J.A. & Corbeels, Marc & Timler, Carl J. & Tittonell, Pablo & R. Ballester, Maria Victoria & Schulte, Rogier P., 2021. "Landholders' perceptions on legal reserves and agricultural intensification: Diversity and implications for forest conservation in the eastern Brazilian Amazon," Forest Policy and Economics, Elsevier, vol. 129(C).

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