Amazon Deforestation

Hadisurjo

James

An article on the Guardian highlights the recent acceleration in the

deforestation of the Brazilian Amazon, part of the increase in
deforestation shows the flaws of the governments environmental
policies.
Deforestation has several implications to the environment, both
negative and positive. The main reasons for deforestation is in order
to make use of the land that is formerly covered by forest, to allow
the grow of crops and other products. However, the clearings of
these forests are at the cost of more are pollution and less climate
stability that can be provided by the existence of forests.
A major cause of this 190% rise of land clearance in the Amazon is
due to the shift in government priorities, Rousseff, the current
President of Brazil is putting a lower priority on the environment and
have made agreements with several agribusiness groups that have
resulted in the loosening of deforestation controls.

The loosening of deforestation controls can be interpreted as an

increase in supply for the agribusiness companies as they have
potential to produce more profit by increasing the scale of the
growing of crops, however, at the expense of more land being
cleared. Although it is a positive event for a business to be able to
increase their sales by lowering prices and producing more goods,
the change in the Brazilian government policy is resulting in
negative externalities on the environment.
In order to make the best decision for the economy, the economic
benefits gained from deforestation must be weighed against the
costs of it. The optimal level of deforestation could possibly be
calculated using the Marginal Social Benefit and Cost curve.

The optimal level of deforestation theoretically would be when

Marginal Social Cost equals Marginal Social Benefit. However, when
conducting the analysis for deforestation, it should be noted that the
activity not only affects the domestic environment but also it affects
multiple regions, the real marginal social cost curve would be a
steeper one than the one displayed above. Quantifying costs of
deforestation, however, might not be easy, for example quantifying
the increase in carbon emissions due to cutting trees would be
difficult to quantify.
Although deforestation has benefits for the society such as the
ability to increase in biofuel supplies available from extra land or the
increase in supply of crops, the Brazilian government should realize
the social costs and negative externalities posed by deforestation
and apply policies that would adjust to the optimal level of
deforestation in order to sustain a healthy environment.

Works Cited:

Callan,Scott,andJanetM.Thomas.EnvironmentalEconomics&
Management:Theory,Policy,andApplications.Mason,OH:South
WesternCengageLearning,2010.Print.
Watts,Jonathan."AmazonDeforestationPickinguppace."Amazon
Deforestation.TheGuardian,19Oct.2014.Web.19Oct.2014.