IDEAS home Printed from https://ideas.repec.org/p/dae/daepap/09-05.html
   My bibliography  Save this paper

The Environmental Impacts of Soybean Expansion and Infrastructure Development in Brazil’s Amazon Basin

Author

Listed:
  • Maria del Carmen Vera-Diaz
  • Robert K. Kaufmann
  • Daniel C. Nepstad

Abstract

For decades, the development of transportation infrastructure in the Brazilian Amazon has been the government’s main social and economic development policy in the region. Reductions in transportation costs have not only opened the agricultural frontier to cattle ranching and logging but have also caused more than two-thirds of Amazonian deforestation. Currently, soybean cultivation is a new economic force demanding improvements to roads in the region. Profitable soybean crops have spread over the Mato Grosso’s cerrados and now head toward the core of the Amazon rain forest. One of the main constraints for soy expansion into the Amazon has been the poor condition of roads. In this study, we analyze the effect Amazon transportation infrastructure programs have on soybean expansion by lowering transport costs. The analysis is based on spatial estimates of transportation costs for the soybean sector, first using current road networks and then projecting changes based on the paving of the Cuiabá-Santarém road. Our results indicate that paving the Cuiabá-Santarém road would reduce transportation costs by an average of $10 per ton for farmers located in the northern part of Mato Grosso, by allowing producers to reroute soybean shipments to the Santarém port. Paving the road also would expand the area where growing soybeans is economically feasible by about 70 percent, from 120,000 to 205,000 km2. Most of this new area would be located in the state of Pará and is covered largely by forests. A Cost-Benefit analysis of the road project indicates that the investments in infrastructure would generate more than $180 million for soybean farmers over a period of twenty years. These benefits, however, ignore the project’s environmental impacts. If the destruction of ecological services and products provided by the existing forests is accounted for, then the Cuiabá-Santarém investment would generate a net loss of between $762 million and $1.9 billion. This result shows the importance of including the value of the natural capital in feasibility studies of infrastructure projects to reflect their real benefits to society as a whole.

Suggested Citation

  • Maria del Carmen Vera-Diaz & Robert K. Kaufmann & Daniel C. Nepstad, "undated". "The Environmental Impacts of Soybean Expansion and Infrastructure Development in Brazil’s Amazon Basin," GDAE Working Papers 09-05, GDAE, Tufts University.
  • Handle: RePEc:dae:daepap:09-05
    as

    Download full text from publisher

    File URL: http://www.bu.edu/eci/files/2020/01/09-05TransportAmazon.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonathan M. Harris & Neva R. Goodwin, "undated". "Reconciling Growth and Environment," GDAE Working Papers 03-03, GDAE, Tufts University.
    2. Jonathan M. Harris, "undated". "Macroeconomic Policy and Sustainability," GDAE Working Papers 01-09, GDAE, Tufts University.
    3. David Dapice, "undated". "Current Economic Conditions in Myanmar and Options for Sustainable Growth," GDAE Working Papers 03-04, GDAE, Tufts University.
    4. Neva R. Goodwin, "undated". "Five Kinds of Capital: Useful Concepts for Sustainable Development," GDAE Working Papers 03-07, GDAE, Tufts University.
    5. Frank Ackerman & Timothy A. Wise & Kevin P. Gallagher & Luke Ney & Regina Flores, "undated". "Free Trade, Corn, and the Environment: Environmental Impacts of US – Mexico Corn Trade Under NAFTA," GDAE Working Papers 03-06, GDAE, Tufts University.
    6. Vera-Diaz, Maria del Carmen & Kaufmann, Robert K. & Nepstad, Daniel C. & Schlesinger, Peter, 2008. "An interdisciplinary model of soybean yield in the Amazon Basin: The climatic, edaphic, and economic determinants," Ecological Economics, Elsevier, vol. 65(2), pages 420-431, April.
    7. Gallagher, Kevin P. & Aguayo, Francisco, 2003. "Economic Reform, Energy, and Development: The Case of Mexican Manufacturing," Working Papers 15575, Tufts University, Global Development and Environment Institute.
    8. Aguayo, Francisco & Gallagher, Kevin P., 2005. "Economic reform, energy, and development: the case of Mexican manufacturing," Energy Policy, Elsevier, vol. 33(7), pages 829-837, May.
    9. Dapice, David, 2003. "Current Economic Conditions in Myanmar and Options for Sustainable Growth," Working Papers 15582, Tufts University, Global Development and Environment Institute.
    10. Goodwin, Neva R., 2003. "Macroeconomics for the 21st Century," Working Papers 15581, Tufts University, Global Development and Environment Institute.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vera-Diaz, Maria del Carmen & Kaufmann, Robert K. & Nepstad, Daniel C., 2009. "The Environmental Impacts of Soybean Expansion and Infrastructure Development in Brazil’s Amazon Basin," Working Papers 179072, Tufts University, Global Development and Environment Institute.
    2. Zarsky, Lyuba, 2010. "Climate-Resilient Industrial Development Paths: Design Principles and Alternative Models," Working Papers 179080, Tufts University, Global Development and Environment Institute.
    3. Frank Ackerman, "undated". "The Unbearable Lightness of Regulatory Costs," GDAE Working Papers 06-02, GDAE, Tufts University.
    4. Timothy A. Wise, "undated". "Agricultural Dumping Under NAFTA: Estimating the Costs of U.S. Agricultural Policies to Mexican Producers," GDAE Working Papers 09-08, GDAE, Tufts University.
    5. Jonathan M. Harris, "undated". "The Macroeconomics of Development without Throughput Growth," GDAE Working Papers 10-05, GDAE, Tufts University.
    6. Timothy A. Wise, "undated". "Identifying the Real Winners from U.S. Agricultural Policies," GDAE Working Papers 05-07, GDAE, Tufts University.
    7. Julie A. Nelson, "undated". "Rationality and Humanity: A View from Feminist Economics," GDAE Working Papers 05-04, GDAE, Tufts University.
    8. Roach, Brian, 2008. "Policies for Funding a Response to Climate Change," Working Papers 179062, Tufts University, Global Development and Environment Institute.
    9. Frank Ackerman & Elizabeth Stanton & Rachel Massey, "undated". "European Chemical Policy and the United States: The Impacts of REACH," GDAE Working Papers 06-06, GDAE, Tufts University.
    10. Ackerman, Frank & Stanton, Elizabeth A., 2006. "Can Climate Change Save Lives? A comment on “Economy-wide estimates of the implications of climate change: Human health"," Working Papers 37240, Tufts University, Global Development and Environment Institute.
    11. Julie A. Nelson, "undated". "Getting Past "Rational Man/Emotional Woman": How Far Have Research Programs in Happiness and Interpersonal Relations Progressed?," GDAE Working Papers 09-07, GDAE, Tufts University.
    12. Timothy A. Wise, "undated". "Policy Space for Mexican Maize:Protecting Agro-biodiversity by Promoting Rural Livelihoods," GDAE Working Papers 07-01, GDAE, Tufts University.
    13. Helwege, Ann & Birch, Melissa B.L., 2007. "Declining Poverty in Latin America? A Critical Analysis of New Estimates by International Institutions," Working Papers 37279, Tufts University, Global Development and Environment Institute.
    14. Frank Ackerman, "undated". "The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections," GDAE Working Papers 05-01, GDAE, Tufts University.
    15. Frank Ackerman & Ian J. Finlayson, 2006. "The economics of inaction on climate change: a sensitivity analysis," Climate Policy, Taylor & Francis Journals, vol. 6(5), pages 509-526, September.
    16. Nelson, Julie A., 2009. "Between a rock and a soft place: Ecological and feminist economics in policy debates," Ecological Economics, Elsevier, vol. 69(1), pages 1-8, November.
    17. Elanor Starmer & Timothy A. Wise, "undated". "Living High on the Hog: Factory Farms, Federal Policy, and the Structural Transformation of Swine Production," GDAE Working Papers 07-04, GDAE, Tufts University.
    18. Shadlen, Ken, 2007. "The Politics of Patents and Drugs in Brazil and Mexico: The Industrial Bases of Health Activism," Working Papers 37710, Tufts University, Global Development and Environment Institute.
    19. Paus, Eva A. & Gallagher, Kevin P., 2006. "The Missing Links between Foreign Investment and Development: Lessons from Costa Rica and Mexico," Working Papers 37156, Tufts University, Global Development and Environment Institute.
    20. Julie A. Nelson, "undated". "Ethics and International Debt: A View from Feminist Economics," GDAE Working Papers 06-04, GDAE, Tufts University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dae:daepap:09-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abdulshaheed Alqunber (email available below). General contact details of provider: https://edirc.repec.org/data/gdtufus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.