Land Use Change in Brazil: A macroregional perspective

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Land Use Change in Brazil A macro-regional
perspective

• Andrea Cattaneo
• Seminar presented at
• Center for International Development
• January 30, 2003

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Overview

• Briefly discuss the issue of scale
• Potential issues/drivers linked to land use
  change in Brazil
• Entry points to discuss economy-environment links
• Compare the order of magnitude of impact on
  deforestation of a subset of drivers of land
  use change

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Choosing the Appropriate Scale

• Key theme to modeling across scale
• The relationship between what we see and the
  scale at which we measure it.
• Leaf Branch Tree Forest
• New properties emerge when data are aggregated
  Operational scale - the scale at which a process
  operates
• different research questions require different
  scales of measurement
• In fact, many models are scale dependent

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Brazil A Multi-Regional Approach

• Issues
• Crisis of Brazilian Currency
• Subsidies Taxes
• Reduction in Amazon transportation costs
• Tenure Regimes
• Technological Innovation
• Method
• Regional CGE model for Brazil

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Economy-Environment Links
Factor Markets
Land/Water
Wages Rents
Factor Costs
Demand for Intermediate Inputs
Producers
Institutions
Product Markets
Energy Materials
Amenities
Sales Revenues
Final Demand
?
Waste Sink
?
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Regional Disaggregation of Model
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Structural Model Characteristics

• Detailed representation of regional agricultural
  technologies small and large farms
• Segmented capital markets
• Model allows for excess supply in factor markets
• Econometrically estimated migration functions

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Structural Model (continued)

• Regional trade and transportation margins
• Deforestation Sector produces arable land
• Biophysical processes affect land use

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Productivity Improvements in Brazilian
Agriculture (1985-1995)
Legal Amazon 30
Northeast 24
Center-West 54
South/SE 22
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Scale
Amazon
Inter-regional
National
International
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Innovation and Agronomic Sustainability in the
Amazon stock effects vs. expectation effects
Increasing sustainability
Increasing sustainability

• Sustainability improvements annuals or
  livestock?
• annuals decrease deforestation, livestock
  increases deforestation
• Productivity improvements increase deforestation

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Strengths of the macro approach

• The structure of the model allows for multiple
  land use change mechanisms
• A lot of structural information is readily
  available
• economic accounting constraints
• factor intensities
• Survey data ag census, production, household,
  labor statistics
• The economic structure can be linked to
  environmental processes

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and the inevitable weaknesses

• Uncertainty about parameters rarely estimated
  econometrically
• Lack of spatial detail is a drawback if
  environmental variables are heterogeneous over
  space
• Requires a lot of effort to build a good model
  no easy off-the-shelf answers to difficult
  questions.