The Effects of Land Use Regulation on Deforestation

Lina O Anderson, Samantha De Martino, Torfinn Harding, Karlygash Kuralbayeva and Andre Lima

No 172, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: To reduce deforestation rates in the Amazon, Brazil established in the period 2004-2010 conservation zones covering an area 1.5 times the size of Germany. In the same period, Brazil experienced a large reduction in deforestation rates. By combining satellite data on deforestation with data on the location and timing of the conservation zones, we provide spatial regression discontinuity estimates and difference-in-difference estimates indicating that the policy cannot explain the large reduction in deforestation rates. The reason is that the zones are located in areas where agricultural production is likely to be unprofitable. We also provide evidence that zones reduce deforestation if the incentives for municipalities to reduce deforestation are high. We rationalize these finding with a spatial economics model of land use, with endogenous location of conservation zones and imperfect enforcement. Our findings point to the need for other explanations than the conservation zones to explain the sharp decline indeforestation rates in the Brazilian Amazon since 2004.

Keywords: regulation; conservation policies; deforestation; Brazil (search for similar items in EconPapers)
JEL-codes: Q28 Q58 R11 R14 (search for similar items in EconPapers)
Date: 2016-04-09
New Economics Papers: this item is included in nep-agr, nep-env and nep-pr~
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Citations: View citations in EconPapers (11)

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