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An Amazon Tipping Point: The Economic and Environmental Fallout

Author

Listed:
  • Onil Banerjee

    (Inter-American Development Bank)

  • Martin Cicowiez

    (CEDLAS-IIE-FCE-UNLP)

  • Marcia Macedo

    (Woodwell Climate Research Centre, Amazon Environmental Research Institute (IPAM))

  • Žiga Malek

    (Institute for Environmental Studies (IVM))

  • Peter Verburg

    (Institute for Environmental Studies (IVM))

  • Sean Goodwin

    (Institute for Environmental Studies (IVM))

  • Renato Vargas

    (CHW Research)

  • Ludmila Rattis

    (Amazon Environmental Research Institute (IPAM))

  • Paulo M. Brando

    (University of California)

  • Michael T. Coe

    (Universit´e Paris-Dauphine)

  • Christopher Neill

    (Woodwell Climate Research Centre)

  • Octavio Damiani

    (Inter-American Development Bank)

Abstract

The Amazon biome, despite its resilience, is being pushed by unsustainable economic drivers towards an ecological tipping point where restoration to its previous state may no longer possible. This is the result of self-reinforcing interactions between deforestation, climate change and fire. In this paper, we develop scenarios that represent movement towards an Amazon tipping point and strategies to avert one. We assess the economic, natural capital and ecosystem services impacts of these scenarios using the Integrated Economic-Environmental Modeling (IEEM) Platform linked with high resolution spatial land use land cover change and ecosystem services modeling (IEEM+ESM). This paper’s main contributions are developing: (i) a framework for evaluating strategies to avert an Amazon tipping point based on their relative costs, benefits and trade-offs, and; (ii) a first approximation of the economic, natural capital and ecosystem services impacts of movement towards an Amazon tipping point, and evidence to build the economic case for strategies to avert it. We find that a conservative estimate of the cumulative regional cost through 2050 of an Amazon tipping point would be US$256.6 billion in Gross Domestic Product. Policies that would contribute to averting a tipping point, including strongly reducing deforestation, investing in climate-adapted agriculture, and improving fire management, would generate approximately US$339.3 billion in additional wealth. From a public investment perspective, the returns to implementing strategies for averting a tipping point would be US$29.5 billion. Quantifying the costs, benefits and trade-offs of policies to avert a tipping point in a transparent and replicable manner can pave the way for evidence-based approaches to support policy action focusing on the design of regional strategies for the Amazon biome and catalyze global cooperation and financing to enable their implementation.

Suggested Citation

  • Onil Banerjee & Martin Cicowiez & Marcia Macedo & Žiga Malek & Peter Verburg & Sean Goodwin & Renato Vargas & Ludmila Rattis & Paulo M. Brando & Michael T. Coe & Christopher Neill & Octavio Damiani, 2020. "An Amazon Tipping Point: The Economic and Environmental Fallout," CEDLAS, Working Papers 0292, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0292
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    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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