The conservation versus production trade-off: does livestock intensification increase deforestation? Evidence from the Brazilian Amazon

Petterson Vale (p.m.vale@alumni.usp.br)

No 174, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: More cattle, less deforestation? Land use intensification in the Amazon is an unexpected phenomenon. Theories of hollow frontier, speculative behaviour and boom-bust all share the prediction that livestock production will remain largely extensive. Yet between 1996 and 2006 productivity of cattle grew by an astounding 57.5% in the average Amazon municipality. Does rising land productivity of cattle increase deforestation? I use secondary data and spatial econometrics to look for evidence of a positive relation between cattle intensification and deforestation (�rebound effect�). The reduced-form model I employ is based on a spatial econometric specification by Arima et al. (2011) and uses panel data at the municipality-level. I show that mounting productivity in consolidated areas has been associated with lower deforestation both in frontier and consolidated municipalities. This suggests that any process of out-migration spurred by the rising productivity is insufficient to have a positive impact on deforestation.

Date: 2014-12
New Economics Papers: this item is included in nep-agr, nep-eff and nep-env
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