FEEM working papers "Note di lavoro" series
2015 .020

The Conservation versus Production Trade-off: Does Livestock Intensification Increase Deforestation? The Case of the Brazilian Amazon


Authors: Petterson Molina Vale
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Keywords: Amazon, Rebound Effect, Intensification, Deforestation, Land Use, Cattle Ranching 
JEL n.: Q53, Q150

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.

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Suggested citation: Molina Vale, P., (2015), 'The Conservation versus Production Trade-off: Does Livestock Intensification Increase Deforestation? The Case of the Brazilian Amazon', Nota di Lavoro 20.2015, Milan, Italy: Fondazione Eni Enrico Mattei.

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