The Economics of Deforestation in the Amazon

Abstract

Deforestation in the Amazon rainforest drives a large share of global greenhouse gas emissions. But different regions within the Amazon vary in their economies and the extent of their emissions. This dissertation studies how differences in regional economies explain the variation in emissions across the Brazilian Amazon, and examines the implications of those differences for environmental policy. Chapter 1 examines the beef cattle supply chain, which is associated with 90% of deforestation in the Brazilian Amazon. In the deforestation frontier, cattle are processed by many small slaughterhouses, whereas the more consolidated ``core'' is dominated by few monopsonistic players. This has implications for regional market power and environmental policy. Chapter 2 focuses on land property rights. Whereas core regions display mostly private property, in the frontier commodity expansion encroaches on public land, the home of indigenous and subsistence groups, and also drives disputes among multiple private actors. Chapter 3 focuses on vertical relationships along the cattle supply chain, between ranchers and also from ranchers to slaughterhouses. The complexity of the supply chain and the multiplicity of short-term supply relationships makes it difficult to monitor agents for illegal behavior, but policy improvements are possible among the largest ranchers.