About Trees and People. What Works for Development, Employment and the Environment in the Brazilian Amazon?

Abstract

This paper contributes to the controversy about development models for the Amazon region, using insights from high-resolution macro-economic models. A Social Accounting Matrix for the Amazon forest and a Computable General Equilibrium Model reveal new and surprising facts and perspectives for policy making. Many more people earn their livelihood from forests in the Amazon than previously thought. Over 525,000 workers (full-time equivalents) were directly employed in forest products harvesting and processing in 2005, and 115,000 in fishing in rivers. Farming and cattle rearing are bigger employers in the Amazon than forests, but incomes are very low for workers in all three sectors. Those activities are also not better than forestry in terms of stimulating growth. One corollary is that even a zero-deforestation policy to meet Brazil´s climate targets would only lead to 0.62% losses of national GDP accumulated until 2030. The losses would, however, be concentrated in the agricultural frontier and in low skilled workers and poorer families. This calls for measures to achieve a just transition as stipulated in the Paris Climate Agreement and promoted by the ILO. Policy should stimulate local economic development, building on the high potential of sustainable forest use and river fishing for local value addition. Improvements in the productivity of land-use and labor as well as transformations of related value chains will be paramount to improve incomes and realize the potential of the region to prosper in a green economy