C au ses of D eforestation of th e B razilian A m azon N O . 2 2 Causes of Deforestation of the Brazilian Amazon

xi Acknowledgments xiii Acronyms and Abbreviations xv Executive Summary xvii 1. Motivation for the Study 1 2. Deforestation and Land Use in Amazonia: Evidence of Large Scale Cattle Ranching 5 Temporal Trend of Deforestation 5 Spatial Patterns at the Municipal Level 6 Evolution of Land Use in Legal Amazonia 9 Contribution of Large and Small Deforested Areas to Overall Deforestation 10 Evolution of the Cattle Herd 13 Socioeconomic Benefits from Deforestation: Early Evidence 14 3. Different Frontiers and Their Economic and Social Dynamics: Determinants of Amazon Occupation 17 Expansion of the “Speculative Frontier” and the Deforestation Process 20 Determinants of Land Occupation in Amazonia: An Econometric Model 25 4. The Microeconomics of Beef Cattle Ranching in Amazonia 29 The Beef Cattle Economy in Amazonia: Brief Background 30 Field Research 32 Technical Parameters Adopted 33 Production Costs: Pastures 36 Net Income per Hectare 37 Analysis of Yield 37 Mathematical Modeling 39 Some Simulations 41 Final Considerations and Trends 43 5. Social Costs and Benefits of Deforestation 47 Government Incentives: Subsidies as a Basis for Cattle Ranching and Deforestation? 48 Estimate of Economic (Social) Costs of Deforestation in Amazonia 51 Sustainable Alternatives: Comparing Costs and Benefits 55 6. Conclusions and Recommendations 59 Main Results: Conclusions 59 Recommendations 62 Annex: Socioeconomic Development in Brazilian Amazonia 67