The cost of forest preservation in the Brazilian Amazon: The “arc of deforestation”

Felipe de Figueiredo Silva, Lilyan E. Fulginiti, Richard K. Perrin

Research output: Contribution to journalArticlepeer-review

Abstract

We estimate the trade-off between agricultural production and forest preservation for the municipalities in Brazil’s agricultural frontier, the so-called “arc of deforestation,” using census and deforestation data for 2006. We use a nonparametric directional output distance function that allows us to identify the gradients of the production possibility frontier, which are the trade-offs of interest. We found that, on average, $979 is forgone in annual livestock, timber, and grain revenues to conserve 1 hectare of forest. This translates, ceteris paribus, to an average present value of costs to permanently sequester CO2 of $16.36/t, higher than most previous estimates.

Original languageEnglish (US)
Pages (from-to)497-512
Number of pages16
JournalJournal of Agricultural and Resource Economics
Volume44
Issue number3
DOIs
StatePublished - 2019

Keywords

  • CO sequestration cost
  • Directional distance function
  • Trade-off

ASJC Scopus subject areas

  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics

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