Trade, Agricultural Expansion, and Climate Change in the Amazon Basin
A Research Program of Tufts’ Global Development and Environment Institute
Soybean production is one of the main economic forces driving the expansion of the agricultural frontier in the Amazon Basin. The expansion of soybean cultivation has important implications for the regional and global economy, rainforest and biodiversity conservation, greenhouse gas emissions, as well as communities of indigenous people and smallholders. Key to that expansion is a series of infrastructure projects designed to reduce transportation costs, which has increased the economic viability of soybean production in the Amazon Region. Foreign demand, particularly from China, is a significant driver of soybean expansion in Brazil, Bolivia, and other producing countries in the region.
Globalization and Sustainable Development Program at Tufts University’s Global Development and Environment Institute (GDAE) will assess the socio-economic and environmental consequences of trade-led agricultural expansion, led by GDAE Senior Research Fellow María del Carmen Vera-Díaz. Based on research begun at Boston University, Vera-Díaz has modeled the likely impacts of infrastructure projects on land use in the Amazon Basin. Her analysis uses spatial-econometric techniques to estimate the change in the returns to land with the completion of different infrastructure projects in the region. Combining ecological and economic data with satellite imaging and GIS analysis, Vera-Díaz offers a detailed mapping of the sensitive forests that these infrastructure improvements transform into potentially profitable soybean agricultural lands.
These studies have provided a conceptual, mathematical, and cartographic framework from which the scientific community and policymakers can analyze policies that seek to maximize the benefits from large-scale agriculture while minimizing negative externalities for the world’s largest tropical rainforest. Carried out in close collaboration with international and regional environmental organizations such as Amazon Environmental Research Institute (IPAM), Woods Hole Research Center (WHRC), and Conservation Strategy Fund (CSF), the maps and projections from this previous research offer a useful tool for the region’s ecological-economic zoning processes. The information can allow governments, international agencies, and non-governmental organizations, domestic and international, to anticipate the threats to the environment and to local communities from the rapid expansion of agro-export production. This has important implications for deforestation, conservation, climate change, and the livelihoods and cultural integrity of indigenous and smallholder communities in the region.
Vera-Diaz is working on the following studies for GDAE’s Globalization and Sustainable Development Program:
- “The Environmental Impacts of Soybean Expansion: A Cost-Benefit Analysis of Cuiabá-Santarém road” – The paving of the road between Cuiabá and Santarém will open new areas of the Amazon to soybean production and other economic activities such as logging, slash-and-burn agriculture, and cattle ranching. A government Cost-Benefit analysis, ignoring environmental costs, indicated that these projects would generate more than $180 million for soybean farmers over twenty years. Vera-Díaz estimates that the environmental costs would be more than four times greater. A revised Cost-Benefit estimate suggests that the Cuiabá-Santarém investment would generate a minimum net loss of $762 million.
- “The Impact of Soybean Expansion on Protected Areas and Indigenous Lands in the Amazon Basin” – An estimated 350,000 sq. km. of the Brazilian Amazon, which is now protected from soybean expansion as either protected areas or indigenous lands, have the potential to be converted to profitable soybean production, particularly with current or planned infrastructure improvements. Vera-Díaz will identify those areas under the greatest threat.
- “Biofuels, Agricultural Expansion, and Deforestation in the Amazon Basin” –Boosted by high oil costs and climate change, biofuels (or agrofuels) have become the front line of alternative sources of energy and the panacea for slowing global warming. Soybeans, used for biodiesel, are an important part of this expansion. This has important implications for the fragile environment in the Amazon Basin. Vera-Díaz will model the changes on soybean demand and prices due to the growth of biofuel market in order to forecast the increase in soybean production under different economic scenarios. She will identify the forested areas most vulnerable to conversion for biofuel production.
María del Carmen Vera-Díaz is an ecological economist. A Senior Research Fellow at Tufts University’s Global Development and Environment Institute, she received her Ph.D in Geography and Environment from Boston University in 2008 and an M.S. in Development Planning from the Federal University of Pará (Belém, Brazil) in 1999. From 1999 to 2003, she worked as a researcher at the Amazon Environmental Research Institute (IPAM) in Belém (Brazil). Her relevant publications include:
- “The Expansion of Intensive Agriculture and Ranching in Brazilian Amazonia,” by Robert Walker, Ruth DeFries, Maria del Carmen Vera-Diaz, Yosio Shimabukuro, and Adriano Venturieri, in Amazonia and Global Change, 2010.
- “The Environmental Impacts of Soybean Expansion and Infrastructure Development in Brazil’s Amazon Basin,” by Maria del Carmen Vera-Diaz, Robert K. Kaufmann, and Daniel C. Nepstad, GDAE Working Paper No. 09-05, June 2009.
- Vera-Diaz, M.D.C., Kaufmann, R., Nepstad, D., and Schlesinger, P. 2008. “An Interdisciplinary Model of Soybean Yield in the Amazon Basin: the Climatic, Edaphic, and Economic Determinants.” Ecological Economics, 65(2): 420-431.
- Vera-Diaz, M.D.C., Reid, J., Soares-Filho, B., Kaufmann, R., and Fleck, L. 2007. “Efectos de los Proyectos de Energía y Transporte en la Expansión del Cultivo de Soya en la Cuenca del Rio Madera.” Conservation Strategy Fund, Serie Técnica No. 7. (Spanish, Portuguese and English versions):
- McGrath, D. and Vera-Diaz, M.D.C. 2006. “Soja na Amazônia: impactos ambientais e estratégias de mitigação.” Ciencia & Ambiente, 32 (2006), p. 151-165.
- Mendonça, M.J., Vera-Diaz, M.D.C., Nepstad, D., Motta, R.S., Alencar, A., Gomes, J.C., and Ortiz, R. 2004. The Economic Costs of the Use of Fires in the Amazon. Ecological Economics, 49 (2004), p. 89-105.
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