Year of Award

2014

Document Type

Thesis - Campus Access Only

Degree Type

Master of Arts (MA)

Degree Name

Economics

Department or School/College

Department of Economics

Committee Chair

Karina Mullan

Commitee Members

Derek Kellenberg, Daniel Spencer

Keywords

Brazil, Reforestation, Deforestation, Environmental Fines, Environmental Licenses, Central Bank Resolution 3545

Abstract

Given the increasing concern regarding global carbon dioxide emissions, effective strategies for carbon sequestration have gained newfound relevance. Reforestation efforts have received particular attention because of the large potential for carbon storage in heavily deforested regions. This study uses a household utility model to analyze land use decisions in the presence of two intervening policies to encourage reforestation; environmental fines and credit restrictions. Empirical models of the extent of primary and secondary forest cover reveal that the risk of environmental fines can be associated with increased forest cover; however, the achieved reforestation is small. Through the use of a probability model it is found that the use of environmental fines and credit restrictions on households significantly increases the probability that a household commits to reforest in the future. These findings suggest that while reforestation gains have not yet been observed there is potential for both environmental fines and credit restrictions to contribute to significant reforestation in the future.

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© Copyright 2014 Christopher Bryant Bradley