Smallholder land clearing and the Forest Code in the Brazilian Amazon

摘要

Small landholders' contribution to Amazon deforestation in Brazil has been persistent even after government actions have allowed a steep reduction in the overall annual deforestation area since 2004. We investigate land clearing and the incentives to comply versus not to comply with environmental legislation, allowing for selection into compliance or noncompliance due to unobserved perceptions of Forest Code enforcement. Our dynamic land clearing model is empirically tested through an endogenous switching regression method applied to data collected from households in the Transamazon-BR163 region between 2003 and 2014, when Forest Code enforcement supposedly increased. We show that smallholder compliance and noncompliance preferences lead to a selection problem that must be addressed in any land clearing behavior examination. We find that greater marginalization, longer land tenure and transitions to cattle grazing, but not agricultural rents, are major contributors to forest clearance and incentives not to comply with the Forest Code.