Seminar

Fires and Fines in the Amazon Forest

Alipio Ferreira ( Toulouse School of Economics)

November 6, 2020, 11:00–12:30

Room Zoom

Public Economics

Abstract

Deforestation in the Brazilian Amazon has fallen sharply since the early 2000s. Better enforcement of environmental law is believed to play a major role in this success story, and the literature provides support to this theory. Deforestation is one of the greatest culprits of carbon emissions in Brazil, and cutting deforestation is part of the country's actions to keep its emissions under control. However, despite relatively low deforestation levels, the use of fire in deforestation increased from 40% to more than 60% of deforested areas from 2008 to 2018. This paper documents the increase in use of fires as a method of deforestation and sheds light on a mechanism that could be behind this phenomenon. In the model, agents may choose between logging and fire, and stricter enforcement induces substitution from logging to fires even though overall deforestation falls. The model assumes that fire offenses are harder to punish than logging offenses, which creates a bonus for using fire as a method of deforestation. Although offenders would prefer to log the land and exploit the values of resources, the risk of being caught may induce them to clear them in the easiest way, which is fire.