Climate Change, Deforestation, and the Expansion of the Global Agricultural Frontier

Allan Hsiao, Jacob Moscona, Benjamin Olken and Karthik Sastry

No 35029, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how global warming affects deforestation and agricultural land use. Using high-resolution satellite data on global temperature, deforestation, and land cover from 2001 to 2019, we find that extreme heat shocks to agricultural productivity cause large and persistent forest loss on the world’s agricultural frontier. This effect is strongest in the tropics, in areas growing the most temperature-sensitive crops, and in regions with the most inelastic demand for agricultural products, and it does not seem to be offset by international spillovers. Moreover, we show that deforestation in response to extreme heat can be explained almost entirely by cropland expansion. We corroborate these findings using agricultural census data from Brazil, where we find evidence for a mechanism whereby heat reduces yields and raises local agricultural prices, driving cropland expansion but little land use or input adjustment along other margins. Our estimates imply that extreme heat has driven substantial forest loss and that projected warming through 2100 could lead to an additional 28 million hectares of deforestation. Our findings challenge the view that reallocation will soften the environmental consequences of climate change, suggesting instead that farmers double down and expand cropland locally when productivity falls.

JEL-codes: O13 Q15 Q23 Q24 Q54 Q56 (search for similar items in EconPapers)
Date: 2026-04
Note: EEE
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