IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v185y2025ics0305750x24002742.html
   My bibliography  Save this article

Economic complexity and deforestation in the Brazilian Amazon

Author

Listed:
  • Silveira, Fabricio
  • Romero, João P.
  • Queiroz, Arthur
  • Freitas, Elton
  • Stein, Alexandre

Abstract

As the Amazon rainforest faces ever-increasing deforestation, finding a balance between conservation and economic progress becomes imperative. This study investigates the relationship between regional economic complexity (ECI-R) and deforestation in municipalities within the Brazilian Amazon between 2006 and 2021. Employing different econometric techniques, we untangle the multifaceted factors determining land use choices while considering variables associated with agriculture, extraction, and livestock activities. Rigorous testing confirms the validity of our findings. The results suggest an “environmental Kuznets curve” at play in the Amazon. This means that a slight increase in regional economic complexity (0.1 unit) initially leads to a significant rise in deforestation (28 %) but is followed by a decrease (8.4 %) in the following year. Interestingly, environmental fines appear to be a powerful tool for controlling deforestation. Further analysis using Probit regressions reinforces the key roles of economic complexity and environmental enforcement. Municipalities with higher regional complexity were 20 % more likely to experience low deforestation and high employment growth between 2006 and 2011. However, this trend reversed in later periods. Ultimately, the results indicate a complex relationship between economic complexity and deforestation. These findings highlight governments’ critical role in promoting sustainable development in the Amazon. There are limits to such an approach but supporting “green” industries and curbing deforestation-related activities can steer the region towards a more prosperous and environmentally responsible future.

Suggested Citation

  • Silveira, Fabricio & Romero, João P. & Queiroz, Arthur & Freitas, Elton & Stein, Alexandre, 2025. "Economic complexity and deforestation in the Brazilian Amazon," World Development, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:wdevel:v:185:y:2025:i:c:s0305750x24002742
    DOI: 10.1016/j.worlddev.2024.106804
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X24002742
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2024.106804?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    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:wdevel:v:185:y:2025:i:c:s0305750x24002742. 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.

    We have no bibliographic references for this item. You can help adding them by using 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/worlddev .

    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.