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The value of tropical forests to hydropower

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  • Araujo, Rafael

Abstract

Tropical forests have a significant impact on rainfall patterns at a continental scale, thereby influencing water supply for energy generation of hydropower plants. I develop a method to value this ecosystem service using an econometric climate model that connects tropical deforestation with rainfall. As an application, I estimate the impact that Amazon deforestation has on the power generation capacity of the Teles Pires hydropower plant in Brazil, one of the ten largest plants in a country where hydropower is the main source of energy. In an ex-post analysis, I map the currently deforested regions in the Amazon with the highest restoration values for the hydroelectric. In an ex-ante analysis, I map the potential cost of deforesting Indigenous Territories. The results provide evidence of the importance of the ecosystem services of tropical forests to the energy sector.

Suggested Citation

  • Araujo, Rafael, 2024. "The value of tropical forests to hydropower," Energy Economics, Elsevier, vol. 129(C).
    • Handle: RePEc:eee:eneeco:v:129:y:2024:i:c:s014098832300703x
    DOI: 10.1016/j.eneco.2023.107205
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    More about this item

    Keywords

    Deforestation; Amazon; Energy; Climate; Hydropower plants;
    All these keywords.

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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