The Price of the Amazon Rainforest

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One proposed method for mitigation of climate change is reforestation . However, any effort is futile if we don't stop first the deforestation . The Amazon Rainforest sits 2/3 in just one country: Brazil . Is it possible, therefore, to incentivize Brazilians to stop deforesting for cattle and other economical activities in order to preserve what is left?

The free-market approach to any problem is throwing money at it. How much would a farmer/rancher need to keep the trees. The simple math would be: how much money does a rancher make a year per hectare and pay them that. It's free money in exchange of no work, so it seems to compensate 1 . This math would give Brazil around 1 or 2 billion dollars a year.

Now, if Brazil produces less food, overall food prices will go up, benefiting farmers in other countries. Are, therefore, values set for the Amazon farmers constantly updating to, say, US farmer rates?

Who pays for it?

However, the value of the Amazon is not just for the money it makes, it's also for the carbon it holds. If we put a price on carbon emissions , the Amazon would have a negative impact and thus the math is very different. The Brazilian government estimates between 10 and 20 billion dollars a year. In such situation, who pays is clearer: whoever emits pays whoever has a negative offset. But this carbon tax has proven to be very elusive in recent years.


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Aquiles Carattino
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