Evaluation of options: economy-wide model
“Best bet” Land-use Systems
Country reports
Alternatives to Slash-and-Burn in Brazil
Promoting Sustainable Intensification
Unique id: IDACNAYB
Source file: D:\Projects\ASB\ASB Country and Thematic reports\Brazil country report\ASB Brazil Summary Report.xml
Authors: S. Vosti, C. L. Carpentier, J. Witcover, . Carvalho dos Santos, E. Muñoz Braz, J. Ferreira Valentim, S. J. de Magalhães de Oliveira, C. Palm, F. de Souza Moreira, A. Cattaneo, A. Gillison, A. Mansur Mendes, V. Rodrigues, T. C. de Araújo Gomes, M. V. Neves d’Oliveira, E. do Amaral, S. Fujisaka, C. Castilla, T. Tomich, D. Bignell, D. Gonçalves Cordeiro, A. Hermes Vieira, R.S. Correira da Costa, M. Faminow, M. Locatelli, M. Swift, S. Weise, M. van Noordwijk, N. Sampaio, I. L. Franke, H. J. Borges de Araujo, L. M. Rossi, E. Barros, B. Feigl, S.P. Huang, J. Cares, C. Pinho de Sá, . Carneiro, P. Woomer
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Simulations using the economy-wide model presented in Section 6 focused on examining trends in deforestation and land use based on policies in effect and technologies available during the study period. In what follows, we report the results of simulations run to examine alternative policies regarding technology within the region and the financial incentives to conserve forested land.
Technological change in Amazonian agriculture
Agricultural technologies play an important role in determining the relative profitability of alternative land uses, and hence of deforestation. The model was used to examine the effects of the following policy-induced technological innovations, assuming they were widely adopted:
• Improvements in pasture/cattle management systems. Thesegenerate large financial returns for all agricultural producers in the Amazon and improve food security in the region. However, they also dramatically increase deforestation in the long run, provided labour is mobile.
• Improvements in perennial crop technology.
Thesereduce deforestation considerably, especially if the productivity of
labour is increased. However, the reduction is muted in the long run if labour
is mobile. The equity effects of
improving perennial crop technology would be progressive: small-scale farmers’
incomes would rise disproportionately.
• Improvements in annual crop technology. These have little potential in the region, would probably increase deforestation in the short run (with some reductions in deforestation in the long run if levels of intensification were very high), and would have minimal income effects.
Financial incentives to farmers to reduce deforestation
A final set of simulations was run to assess the effects on deforestation and land use of taxes and transfer payments aimed at correcting prices for the non-market benefits and costs stemming from different land uses. Applying a logging tax in the Amazon, even taking into consideration the link between logging and deforestation, would not lead to a decrease in the deforestation rate, but it would have a considerable negative impact on the logging industry. A deforestation tax, on the other hand, would prove more effective: in the case of a tax of R$ 50 per ha on deforestation (equivalent to a 0.25 R$ per tonne carbon tax), deforestation would be reduced by approximately 9000 km2 per year, with logging being only minimally affected. Extractive activities and agents pursuing them would gain from this tax and would expand output by about R$ 60 million (a 25% increase). Smallholder incomes would, however, be reduced by this policy.
An
alternative would be to support forest conservation by subsidizing the
extraction of non-timber forest products (NTFPs). Simulation results suggest
that a subsidy of R$ 240 per ha to NTFP activities would reduce deforestation
by approximately 30%; a subsidy of R$ 150 per ha would lead to a 12% reduction,
while R$ 360 per ha would bring about a 50% reduction. From a welfare standpoint, all regions of