An Amazon Tipping Point: The Economic and Environmental Fallout

Onil Banerjee, Martín Cicowiez, Marcia Macedo, Žiga Malek, Peter Verburg, Sean Goodwin, Renato Vargas, Ludmila Rattis, Paulo M. Brando, Michael T. Coe, Christopher Neill and Octavio Damiani
Additional contact information
Onil Banerjee: Inter-American Development Bank
Marcia Macedo: Woodwell Climate Research Centre, Amazon Environmental Research Institute (IPAM)
Žiga Malek: Institute for Environmental Studies (IVM)
Peter Verburg: Institute for Environmental Studies (IVM)
Sean Goodwin: Institute for Environmental Studies (IVM)
Renato Vargas: CHW Research
Ludmila Rattis: Amazon Environmental Research Institute (IPAM)
Paulo M. Brando: University of California
Michael T. Coe: Universit´e Paris-Dauphine
Christopher Neill: Woodwell Climate Research Centre
Octavio Damiani: Inter-American Development Bank

CEDLAS, Working Papers from CEDLAS, Universidad Nacional de La Plata

Abstract: The Amazon biome, despite its resilience, is being pushed by unsustainable economic drivers towards an ecological tipping point where restoration to its previous state may no longer possible. This is the result of self-reinforcing interactions between deforestation, climate change and fire. In this paper, we develop scenarios that represent movement towards an Amazon tipping point and strategies to avert one. We assess the economic, natural capital and ecosystem services impacts of these scenarios using the Integrated Economic-Environmental Modeling (IEEM) Platform linked with high resolution spatial land use land cover change and ecosystem services modeling (IEEM+ESM). This paper’s main contributions are developing: (i) a framework for evaluating strategies to avert an Amazon tipping point based on their relative costs, benefits and trade-offs, and; (ii) a first approximation of the economic, natural capital and ecosystem services impacts of movement towards an Amazon tipping point, and evidence to build the economic case for strategies to avert it. We find that a conservative estimate of the cumulative regional cost through 2050 of an Amazon tipping point would be US$256.6 billion in Gross Domestic Product. Policies that would contribute to averting a tipping point, including strongly reducing deforestation, investing in climate-adapted agriculture, and improving fire management, would generate approximately US$339.3 billion in additional wealth. From a public investment perspective, the returns to implementing strategies for averting a tipping point would be US$29.5 billion. Quantifying the costs, benefits and trade-offs of policies to avert a tipping point in a transparent and replicable manner can pave the way for evidence-based approaches to support policy action focusing on the design of regional strategies for the Amazon biome and catalyze global cooperation and financing to enable their implementation.

JEL-codes: C68 O13 Q5 Q54 (search for similar items in EconPapers)
Pages: 104 pages
Date: 2020-12
New Economics Papers: this item is included in nep-agr and nep-env
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Related works:
Working Paper: An Amazon Tipping Point: The Economic and Environmental Fallout (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:dls:wpaper:0292

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