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Ecosystem Service Value and Agricultural Conversion in the Amazon: Implications for Policy Intervention

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Abstract

We explore the welfare implications of agricultural expansion in the Brazilian Amazon by comparing spatially explicit estimates of soybean rents and the value of ecosystem services. Although these estimates are generated from different datasets, models, and estimation techniques, the values are comparable, such that the value of ecosystem services is greater than soybean rents for about 61% of the total area and 24% of the area where soybean rents are positive if protected areas are well enforced. Based on the balance between the benefits and costs of conversion, failure to value ecosystem services reduces total social welfare by 7.13 billion dollars annually relative to an optimum. Policy instruments that internalize the value of ecosystem services via protected lands, land conversion taxes, conservation subsidies, or excise taxes can avoid much of this loss. Regardless of intervention regime, policy makers should be cognizant of the diminishing net benefits of converting natural ecosystems to agriculture. Realizing the final 3.8% requires the conversion of an additional 15% natural ecosystems to soybean production.

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Authors and Affiliations

  1. Center for Energy and Environmental Studies, Boston University, 675 Commonwealth Ave., Boston, MA, 02215, USA

    Michael L. Mann, Robert K. Kaufmann & Dana Marie Bauer

  2. Department of Geography and Environment, Boston University, 675 Commonwealth Ave., Boston, MA, 02215, USA

    Michael L. Mann, Robert K. Kaufmann, Dana Marie Bauer, Sucharita Gopal & James G. Baldwin

  3. Department of Environmental Science, Policy and Management, University of California-Berkeley, 130 Mulford Hall #335, Berkeley, CA, 94720, USA

    Michael L. Mann

  4. GDAE, Tufts University, 44 Teele Avenue, Medford, MA, 02155, USA

    Maria Del Carmen Vera-Diaz

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  1. Michael L. Mann
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  2. Robert K. Kaufmann
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  3. Dana Marie Bauer
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  4. Sucharita Gopal
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  5. James G. Baldwin
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  6. Maria Del Carmen Vera-Diaz
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Correspondence to Michael L. Mann.

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Mann, M.L., Kaufmann, R.K., Bauer, D.M. et al. Ecosystem Service Value and Agricultural Conversion in the Amazon: Implications for Policy Intervention. Environ Resource Econ 53, 279–295 (2012). https://doi.org/10.1007/s10640-012-9562-6

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  • DOI: https://doi.org/10.1007/s10640-012-9562-6

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