Did the implementation of Bolsa Floresta have a positive impact on reducing deforestation in Amazonas?

Responsible researcher: Eduarda Miller de Figueiredo

Article title: ENVIRONMENTAL KUZNETS CURVE AND THE BOLSA FOREST PROGRAM IN THE STATE OF AMAZONAS: AN APPLICATION OF SPATIAL ECONOMETRY

Authors of the article: Neuler André Soares de Almeida and Osmar Tomaz de Souza

Location of intervention: Amazonas, Brazil

Sample size: 62 municipalities

Sector: Environment, Energy & Climate Change

Type of intervention: Bolsa Floresta – financial compensation for families living in Conservation Units

Variable of main interest: Deforestation

Assessment method: Others

Policy Problem

The Amazon region is extremely important within the national and global context. In addition to the size of the region, its ecosystem is extremely relevant, thus raising questions about how to ensure management of this environment taking into account social, environmental, cultural, geographic and demographic issues.

Due to global concern about deforestation in the Amazon, governments in the Legal Amazon area looked for alternatives to try to deal with environmental degradation. The Fundação Amazonas Sustentável (FAS) emerged in 2007 as an institutional body aiming to stop the expansion of deforestation in the southern part of the State of Amazonas. This initiative arises through the Bolsa Floresta Program, which aims to financially compensate families living in State Conservation Units.

Implementation and Evaluation Context

The Environmental Kuznets Curve (CKA) hypothesizes the existence of a relationship between indicators of environmental degradation and economic development, given that as a country ascends to the stages of economic growth, stronger pressures on the environment will occur. Thus, the expected behavior is that of an inverted “U” shaped curve, exposing the hypothesis that in the early stages of development environmental degradation would occur anyway but, as income grew, incentives to improve environmental quality would emerge. , reducing levels of environmental degradation (Bathattari and Hamming, 2004).

Figure 1. Environmental Kuznets Curve.

Source: Prepared by the authors.

Thus, the conception of several authors is that countries go through stages of development where there are institutional changes and market forces. In the first stage, where there is a transition from an agricultural to an industrialized economy, there will be strong pressures on the environment. The next stage is typified by the maturation of society and industrial infrastructure, with high levels of pollution. From this, technological improvements would increasingly reduce the process of generating waste and other waste. Finally, in the last stage, there would be an end to any relationship between economic growth and environmental pressure (Grossman and Krueger, 1995; Teixeira and Bertella, 2010). And it is these stages that support the Environmental Kuznets Curve.

Therefore, the research seeks to test the hypothesis of the Environmental Kuznets Curve for the State of Amazonas, observing the existence of some type of influence of the Bolsa Floresta Program on deforestation in this region in 2008.

Policy Details

The Bolsa Floresta Program seeks to reward and improve the quality of life of families who enjoy and depend on the forest for their survival, contributing to the preservation and conservation of environmental resources in a sustainable way. According to Sorrentino et al (2005), the program is a public policy to mitigate the destruction of tropical forests through environmental education, which occurs with the inclusion of local communities in workshops on climate change and sustainability.

Figure 2 . Structure and schedule of Bolsa Floresta benefits

The program is divided into four modalities, providing associations, income, sustainable production and basic social services. In Bolsa Floresta Renda, family income is increased with the intention of encouraging sustainable production practices, helping with forest management and sustainable exploration of rivers, lakes and streams [1] . The Bolsa Floresta Social grants an amount per Conservation Unit for improvements in education, health, communication and transport. In this way, environmental education will increase popular interest in environmental issues, improving the quality of life through environmentally correct practices. The third modality is the Bolsa Floresta Association, which promotes participatory management by strengthening community organization. And, finally, the Bolsa Floresta Familiar which grants financial compensation to families that are willing to make a commitment to environmental conservation.

Methodology Details

Through spatial econometrics, which deals with the interaction of spatial structures, the study will analyze the possibility that the Bolsa Floresta Program is providing positive or negative effects on deforestation in the State of Amazonas. Furthermore, the authors use Exploratory Spatial Data Analysis (AEDE) to characterize the spatial distribution, its spatial association patterns, identify atypical observations ( outliers ) and spatial instability.

The sample used in the study contains 62 observations, which are the municipalities of Amazonas, for the year 2008. This allowed the authors to analyze any influence of the Bolsa Floresta Program on deforestation rates in the State of Amazonas, since they started from the premise that, at the As this public policy is implemented, increase the number of municipalities that contribute to reducing deforestation.

Preliminarily, the regression model was estimated using the Ordinary Least Squares Method (OLS), using deforestation per km² as the dependent variable. The explanatory variables were: i) the logarithm of the ratio between the deforested area and its population; ii) logarithm of the ratio between the municipality’s GDP and its population; iii) logarithm of municipal GDP squared.

Main Results

The results demonstrated that 78% of deforestation in the State of Amazonas is explained by the explanatory variables and that the Bolsa Floresta variable is not significant, therefore the variable referring to public policy has no influence on deforestation.

The authors noted that the Environmental Kuznets Curve hypothesis was not proven. According to the results obtained in the study, deforestation starts at a high level where, as GDP increases, deforestation falls until the inflection point, where it rises again. Thus, indicating that continuous growth in income does not guarantee continuous growth in environmental quality, observing from the point of view of the reduction in the deforested area. Therefore, the authors argue that the Environmental Kuznets Curve is not sustainable in the long term. Thus, the inverted “U” shape would only be an initial stage of the relationship between economic growth and environmental pressure, following the results found by Grossman and Krueger (1995) and Teixeira and Bertella (2010).

With the Moran , a positive global spatial autocorrelation was observed between deforestation occurring in the municipality and its neighbors. In other words, deforestation does not occur randomly, it is influenced by deforestation that occurs in other municipalities. Geary 's C statistic , positive global spatial autocorrelation was observed in the deforestation process among Amazonian municipalities.

Figure 3. Deforestation by municipality in km²

As can be seen in Figure 3, the darker regions show where deforestation levels are not yet very high, as these regions are more populated and less rural. In light regions, the authors show places where deforestation is occurring with greater force.

In conclusion, the authors emphasize that the Bolsa Floresta Program was created in 2007, therefore in the year of the study (2011) little time had passed since its implementation, thus explaining the non-significance in the model.

Public Policy Lessons

The Bolsa Floresta concession had no influence on reducing deforestation in the region of the State of Amazonas. Furthermore, this region also did not meet the hypothesis of a relationship between indicators of environmental degradation and economic development, therefore, the Environmental Kuznets Curve would not be sustainable in the long term.

Reference : DE ALMEIDA, Neuler André Soares; DE SOUSA, Osmar Tomaz. Environmental Kuznets Curve and the Bolsa Floresta Program in the state of Amazonas: an application of spatial econometrics. SOUTH REGION ECONOMY MEETING, v. 14, 2011.

[1] Igarapé means Amazonian watercourses of the first or second order, narrow arms of rivers or channels existing in large numbers in the Amazon basin, characterized by shallow depth, and by running almost inside the forest .