The Dynamics of Deforestation and Economic Growth in the Brazilian Amazon

Deforestation in the Amazon has become an emotional topic and thus it is unlikely that scientific or economic research alone will be able to resolve the question of what the socially optimal combinations of end-uses in the Brazilian Amazon are. Agreement among people with diverse preferences and backgrounds is often difficult, and all the more so in this case owing to the underlying uncertainty regarding different choices. Many of the biophysical processes and feedback effects that connect forests with biological and climatic systems are not yet well understood, so within the bounds of normal scientific discourse people can have different beliefs about the probable biological and climatic risks associated with deforestation. Furthermore, even among those that share the same risk assessment, people will have varying degrees of risk aversion and may disagree on how to proceed.

Even if all the scientific controversies could be resolved, different people could still legitimately reach different conclusions. Some people might be relatively more concerned about the extinction of species and loss of natural habitat on either scientific or ethical grounds, while others may not care much about the extinction of animals that never were important to them in the first place. Some might prefer to champion the cause of indigenous cultural survival of native peoples, while others would promote the interests of poor landless peasants.

Indeed, as something like 85 percent of the Amazon forest has not yet been cleared, public policy set today will have a major impact on how the remaining area is managed. While many search for solutions that will satisfy as many perspectives as possible, ultimately there will be trade-offs to be made. Attempting to provide a better understanding of some of those trade-offs has been the purpose of the analyses presented in this book.

Let us first summarize the main facts about the status of clearing and development in the Brazilian Amazon. The area comprises roughly

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