Land use change and forests in Brazil: an approach from a Computable General Equilibrium model

Abstract

This research project aims to develop a module for the sector of land use change and forests, which will be incorporated into a general equilibrium model of the Brazilian economy. More specifically, we intend to analyze through the modified model, as the Brazilian economy will respond to policies to reduce deforestation, as well as the implications of these on indicators of welfare and economic development. To do this, will be used the dynamic version of an applied general equilibrium model, adapted to the Brazilian economy, the TERM-BR. To achieve the objectives of this study, two methodological steps should be followed. The first is the expansion and improvement of the database to the model and the second is to continue the effort of modelling the land use change and forests, through transition matrices. This task arises as an important research challenge, which is a recent development in the literature. Once completed the steps above, will be possible to assess the economic and social impacts of the adoption of climate policies to reduce emissions. Still, it will be possible to analyze the pattern of occupation of Brazilian space in terms of the main economic activities in each region, as well as the aggregate social costs associated with controlling deforestation, indicating which sectors, products and agents will benefit or lose from the implementation of policy scenarios. (AU)