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Potential impacts of changes in the Brazil’s New Forest Code on Agriculture, 2010 to 2030: an integrated analysis based on the GLOBIOM-Brazil and TERM-Br

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  • Santos, Mari Aparecida dos
  • Ferreira Filho, Joaquim Bento de Souza
  • Vieira Filho, José Eustáquio Ribeiro
  • Ywata, Alexandre Xavier de Carvalho

Abstract

The objective of this research was to compare the economic impacts of changes in the New Forest Code on the economic sectors and regions of Brazil. There are three possible scenarios: 1) restrict the land use in case of partial use of the mechanism of Environmental Reserves Quotas (CRA in portuguese); 2) restrict the land use in case of disapproval of the compensation mechanism (CRA); and 3) land use restriction is related to disregarding the amnesty of fines and sanctions granted by Law n °12.651 / 2012. The data regarding the restrictions of different scenarios is integrated to the general equilibrium models for Brazil, TERM-BR and GLOBIOM-Brazil.The results showed that the value of the macroeconomic aggregates, in the accumulated period from 2010 to 2030, compared to the baseline, there was a drop in GDP of 0.12%, 0.14% and 051% in scenarios 1, 2 and 3 , respectively. As there was also a decline in consumption, government and import (vol.) , which decreased of 0.1% (scenarios 1 and 2) and around 0.5% (scenario 3), investment decreased by 0.8% , 0.8% and 3.1% in the respective scenarios 1,2 and 3. The percentage decrease in real salary higher than in consumption, which there was a reduction of 0.3% (scenarios 1 and 2) and 1 , 2% (scenario 3). Exports increased by 0.4% in the first and second scenario, while in the third scenario the increase is close to 1.9%. The downturn in the domestic market puts pressure on the agro-export sectors for commercialization in the international market. In the first scenario, the region most affected economically was that of Pará-TO, with a drop of 2.5% in regional GDP. In the second scenario, the state of Mato Grosso showed the greatest drop in GDP, at 4.5%. In the third scenario, Goias was the most affected, with a fall of 4.3% in GDP. In addition, it was observed that soybean and cattle raising are the activities most negatively impacted by such changes in environmental policy.

Suggested Citation

  • Santos, Mari Aparecida dos & Ferreira Filho, Joaquim Bento de Souza & Vieira Filho, José Eustáquio Ribeiro & Ywata, Alexandre Xavier de Carvalho, 2018. "Potential impacts of changes in the Brazil’s New Forest Code on Agriculture, 2010 to 2030: an integrated analysis based on the GLOBIOM-Brazil and TERM-Br," Conference papers 332973, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332973
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    1. Ferreira-Filho, Joaquim Bento de Souza & Horridge, Mark, 2012. "Endogenous Land Use and Supply, and Food Security in Brazil," Conference papers 332215, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Joaquim Bento de Souza Ferreira Filho & Luis Ribera & Mark Horridge, 2015. "Deforestation Control and Agricultural Supply in Brazil," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 589-601.
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