Foreign Demand and Soy Exports: Evidence and Implications for Deforestation

Demande étrangère et les exportations de soja: preuves et implications pour la déforestation

Léa Crepin and Clément Nedoncelle
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Léa Crepin: UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres

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Abstract: The current paper aims to assess the credibility of demand-side policies to curb deforestation. We tackle this question focusing on the Brazilian soy sector, as conversion from forests to soy-producing areas is a major driver of deforestation. We estimate a firm-level gravity model relating soy exports to destination-specific soy demand. First, we estimate a positive elasticity of soy exports to foreign demand, which confirms the credibility of demand-side policies. Second, we document that the average response hides significant heterogeneities across exporters and across municipalities. Combining export elasticities with soy expansion possibilities, we conclude that demand-side policies could hence avoid aggregate deforestation, particularly in regions proximate to the Amazon.

Keywords: Agriculture; Trade; Firms; Deforestation; Soja (search for similar items in EconPapers)
Date: 2024-09
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-04312450v2
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