Rodrigo R. Soares
(INSPER)
“Deforestation as an Option: Land Grabbing in the Brazilian Amazon”
Abstract: Curbing deforestation in the Amazon is essential for climate change mitigation and biodiversity preservation, but the effectiveness of property rights and environmental policies may depend crucially on political factors. We study the impact of changes in enforcement following the 2019 change in government in Brazil. We compare municipalities more and less exposed to new fronts of land appropriation opened up by loggers. Using a difference-in-differences design, we find that deforestation accelerated after 2019, with large and significant effects estimated for Undesignated Public Forests, where property rights are poorly enforced, but not for Protected Areas, where land use rules are clearer. In an alternative empirical design that explores within municipality variation across Undesignated Public Forests and Protected Areas, we obtain similar results. Using data on self-declared ownership and cattle raising, we provide evidence that land grabbing for speculatory purposes is likely the key factor behind the increase in deforestation.