Deforestation in the Amazon is driven more by domestic demand than by the export market

(Press-News.org) Brazilian Legal Amazonia (BLA) – which comprises the entirety of the Amazon Basin located in Brazil and vast adjacent swathes of the Cerrado, spanning nine states – is more than 5 million square kilometers (km2) in area and corresponds to almost 60% of the country’s land mass. Almost a quarter of this area (23%) has been deforested, and over 1 million km2 are degraded, so that the region risks reaching an ecological tipping point at which ecosystems collapse and billions of tons of carbon are released into the atmosphere. Some parts of BLA, especially borderlands of the Cerrado and the so-called “Deforestation Arc”, are now net carbon emitters. Conservation of the virgin forest areas and rehabilitation of degraded areas are urgently needed, and members of the global community are taking action in this regard.

Foreign demand for commodities is often considered the main driver of deforestation. It is certainly significant, but domestic markets exert far greater pressure, according to a study by Eduardo Haddad and collaborators published in the journal Nature Sustainability.

“Deforestation is often evaluated from the supply standpoint, meaning the analysis focuses on the productive sectors that are promoting replacement of forest by other land uses, such as growing of crops and raising of livestock. The methodology we used enabled us to see the phenomenon of deforestation from the demand perspective as well, identifying the sources of the economic stimuli that get productive sectors involved in deforestation. Based on this criterion, our study shows that 83.17% of deforestation was driven by demand from outside Amazonia and only 16.83% by demand from the region. Breaking down that 83.17%, we found that demand from other parts of Brazil accounted for 59.68% and foreign demand for 23.49%,” Haddad said.

Haddad is full professor at the University of São Paulo’s School of Economics, Administration, Accounting and Actuarial Science (FEA-USP), and a consultant to multilateral development finance organizations such as the World Bank, Inter American Development Bank (IDB), Organization for Economic Cooperation and Development (OECD), United Nations Development Program (UNDP) and Joint Africa Institute (JAI).

The methodology used in the study was based mainly on the input-output matrix model developed by Russian-born American economist Wassily Leontief (1906-1999). The model represents the relations among economic sectors as a matrix, showing how inputs in one industry produce outputs for consumption or for use as inputs by another industry, and how changes in production of goods or services affect demand for inputs.

“In Brazil, the most recent input-output matrix was produced by IBGE [the national statistics bureau] in 2015. It hasn’t been updated since then, owing to mathematical complexity and restricted access to data for millions of companies and their business structures. Using data for 2015 would be inadequate if not for the unfortunate fact that the structure of the Brazilian economy has changed very little in the meantime.

The 2010s were the worst decade for GDP in the 120-year time series, with growth of only 0.3% per year on average. We used the 2015 input-output matrix adapted for BLA, combined with sectoral and regional deforestation data and greenhouse gas emissions, to measure the direct and indirect impact of domestic and foreign demand for BLA’s inputs and outputs, focusing on deforestation-intensive sectors such as agriculture,” Haddad explained.

Land-use changes

The Amazon has undergone enormous changes in the last half-century. Technical innovations, investment in infrastructure and political changes have facilitated the expansion of soybean farming from the central Cerrado to vast portions of BLA. Local production of soybeans, which was less than 200 metric tons in 1974, or a mere 0.02% of the national total, reached 50 million mt in 2022, accounting for 41.5% of the total. Livestock farming has expanded just as vertiginously, from 8.9 million head of cattle in 1974 (9.5% of the national total) to 104.3 million in 2022 (44.5% of the total).

“The expansion of cattle ranching was driven mainly by growth in consumption of beef, dairy and leather goods in other parts of Brazil. In line with the rise in per capita income and rapid urbanization, meat consumption rose faster than the world average after the 1960s. Of the 1.4 million hectares deforested to make way for cattle pasture, 61.63% responded directly or indirectly to domestic demand from outside the Amazon and 21.06% to foreign demand. Deforestation to make way for crops displayed a different pattern, with 58.38% responding to demand for exports and 41.62% to domestic demand,” Haddad said.

The article on the study in Nature Sustainability notes that deforestation in Brazil has been concentrated geographically in BLA, affecting different biomes. In 2015, BLA accounted for 65.7% of total deforestation nationwide. Cattle ranching was the main immediate cause (with 93.4% of the regional total), followed by farming of crops, mainly soybeans, corn and cotton (6.4%), and mining (0.2%). Construction of infrastructure and intensive urbanization were among the anthropic drivers directly linked to the elimination or degradation of the original plant cover in the Amazon Rainforest and Cerrado biomes.

“Illegal activities such as grilagem [misappropriation of government land via falsification of title deeds] are highly relevant in this context. A recent study shows that half of all the deforestation seen in BLA in the last two decades took place on government land illegally occupied by grileiros. Litigation over land ownership lasts decades and doesn’t prevent most illegal areas or illegal deforestation on private property from participating in both the market for land and the production process,” Haddad said.

This latest study by Haddad et al. shows that economic demand from Brazil’s most developed regions (Southeast, Center-West and South) is an even stronger driver of deforestation in the Amazon than the export market. This finding is an important contribution to policymaking and action by civil society to conserve or regenerate such areas. Moreover, because land-use changes via cattle ranching and monoculture are still the main sources of CO2 emissions in Brazil, control of deforestation and degradation is imperative if Brazil is to achieve its greenhouse gas emission reduction targets.

Haddad is the corresponding author of the article, whose last author is Carlos Afonso Nobre. The other co-authors are Inácio Fernandes de Araújo Junior, Rafael Feltran Barbieri, Fernando Salgueiro Perobelli, Ademir Rocha, and Karina Simone Sass.

FAPESP supported the study via two projects (14/50848-9 and 21/12397-9).

About São Paulo Research Foundation (FAPESP)

The São Paulo Research Foundation (FAPESP) is a public institution with the mission of supporting scientific research in all fields of knowledge by awarding scholarships, fellowships and grants to investigators linked with higher education and research institutions in the State of São Paulo, Brazil. FAPESP is aware that the very best research can only be done by working with the best researchers internationally. Therefore, it has established partnerships with funding agencies, higher education, private companies, and research organizations in other countries known for the quality of their research and has been encouraging scientists funded by its grants to further develop their international collaboration. You can learn more about FAPESP at www.fapesp.br/en and visit FAPESP news agency at www.agencia.fapesp.br/en to keep updated with the latest scientific breakthroughs FAPESP helps achieve through its many programs, awards and research centers. You may also subscribe to FAPESP news agency at http://agencia.fapesp.br/subscribe.

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