Can economic development and forest conservation coexist? Revisiting growth and deforestation in the Brazilian Amazon

Pedro Henrique Batista de Barros and Ariaster Baumgratz Chimeli

World Development, 2025, vol. 195, issue C

Abstract: We examine the effect of municipal income on deforestation in the Brazilian Amazon over a period marked by relatively stable environmental protection institutions and a sharp decline in forest loss. While microeconometric studies yield valuable causal estimates linking development indicators and deforestation, they frequently neglect general equilibrium effects that are essential for effective policy design. To address this, we deploy a dynamic spatial-panel model applied to a large region and with a rich set of controls for drivers stemming from the recent microeconometric literature. We estimate a negative and statistically significant relationship between deforestation and GDP per capita, with effects concentrated in agricultural frontier municipalities and at middle-to-upper income levels. We attribute this relationship to less land-intensive activities in more urban settings, poverty reduction, increased agricultural productivity, and improved access to national markets. Extending the analysis to an environmental-health index that incorporates biodiversity loss and ecosystem services shows consistent complementarities with income growth. Our contribution lies in integrating causal micro-insights within a spatially aware framework allowing for general equilibrium effects, offering policy relevance by highlighting how income growth can align with sustainable forest management when system-wide interactions are considered.

Keywords: Economic development; Deforestation; Amazon (search for similar items in EconPapers)
JEL-codes: Q23 Q56 Q57 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305750X25002086
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:195:y:2025:i:c:s0305750x25002086

DOI: 10.1016/j.worlddev.2025.107123

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().