The Role of Climate Risk on Land Allocation in Brazilian Amazon

Available from: 
April 2018
Paper author(s): 
Marcelo D. P. Ferreira
José G. Féres
Environmental Economics

This article aimed to assess how climate risk is associated to land use in Brazilian Amazon. We developed a land use model that accounts for land as fixed but allocatable input and yield risk associated to climate variables. The estimated land use equations show that establishment of pastures is associated to municipalities with higher annual-rainfall variability. Hence, policies aiming to reduce deforestation in the region will not lead to a strong process of land reallocation from pastures to crops, as this policies do not affect climate pattern. Our main conclusion is that the economic impacts of deforestation reduction in literature are overestimated regarding land reallocation because they do not consider climate risk.


Research section: 
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