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Out of the Woods? The Long-Term Costs of Biodiversity Loss for Brazil’s Agricultural Sector

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  • Widmaier, A.

Abstract

This paper constructs a novel biodiversity dataset for Brazil, measuring the annual change in species richness during 1985-2020 at 300m resolution. It then uses a spatio-temporal ARDL model to establish the long-run effects of bio-diversity loss on agricultural yields. Brazil lost 8 percentage points in species richness compared to an undisturbed baseline during 1985-2020, largely driven by substantial reductions in regions bordering the Amazon. Long-run crop yields decreased up to 4% for every percentage point in biodiversity loss, and up to 10% when considering pest control species. Resulting soybean and maize yield decreases reduced agricultural GDP by 15.3% in 2020.

Suggested Citation

  • Widmaier, A., 2025. "Out of the Woods? The Long-Term Costs of Biodiversity Loss for Brazil’s Agricultural Sector," Cambridge Working Papers in Economics 2543, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2543
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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