Social and Behavioral Sciences Commons^™

The Cost Of Forest Preservation In The Brazilian Amazon: The “Arc Of Deforestation”, Felipe De Figueiredo Silva, Lilyan E. Fulginiti, Richard Perrin

Department of Agricultural Economics: Faculty Publications

We estimate the trade-off between agricultural production and forest preservation for the municipalities in Brazil’s agricultural frontier, the so-called “arc of deforestation,” using census and deforestation data for 2006. We use a nonparametric directional output distance function that allows us to identify the gradients of the production possibility frontier, which are the trade-offs of interest. We found that, on average, $979 is forgone in annual livestock, timber, and grain revenues to conserve 1 hectare of forest. This translates, ceteris paribus, to an average present value of costs to permanently sequester CO2 of $16.36/t, higher than most previous estimates.