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The Effects of Transportation Infrastructure on Deforestation in the Amazon : A GeneralEquilibrium Approach

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  • Assunção,Juliano
  • Carlquist Rabelo De Araujo,Rafael
  • Amorim Braganca,Arthur

Abstract

Investments in transportation infrastructure can impact the environment beyond theirimmediate surroundings. This paper builds an interregional trade model to estimate the general equilibrium effects ofchanges in infrastructure on deforestation. Using panel data on the evolution of the transportation network in Brazil andland use data in the Amazon, the paper estimates the model and finds sizable effects of infrastructure ondeforestation. Model simulations show that ignoring general equilibrium underestimates the impacts of deforestation byone-quarter. The paper also shows that the model can be used for evaluation of the deforestation induced by individualprojects, which is an essential input for public policies.

Suggested Citation

  • Assunção,Juliano & Carlquist Rabelo De Araujo,Rafael & Amorim Braganca,Arthur, 2023. "The Effects of Transportation Infrastructure on Deforestation in the Amazon : A GeneralEquilibrium Approach," Policy Research Working Paper Series 10415, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10415
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