Amazon Deforestation Will Harm Brazilian Agriculture

The case of deforestation in the Brazilian Amazon is often presented as a case of the environment versus the economy. 

From one point of view, the forest is the lungs of the world, a vital carbon sink that must be protected at all costs to prevent the climate crisis from worsening. From another perspective, the region is a treasure trove of natural resources and potential agricultural land that some powerful actors in Brazil feel they have the right to exploit for profit. 

Now, a new analysis from non-profit think tank Planet Tracker argues that this is a false binary: Continued Amazon deforestation will actually harm the agricultural successes used to justify it.

“[T]his study and others like it  . . .really obliterate the idea that ending tropical deforestation is something that Brazil and other countries do as a favor to the rest of the world at the expense of their own development,” Frances Seymour, a distinguished senior fellow at the World Resources Institute says at a press call announcing the findings. “I think we've made a mistake in framing forest conservation as almost exclusively a global public good, which it is, but without sufficiently recognizing the many tangible ways that ending deforestation serves domestic self-interest as well.”

An Own Goal

Everyone knows the Amazon rainforest is in trouble. A total of 2,095 square kilometers (approximately 809 square miles) were cleared this July alone, up 80% from the same month last year. Further, deforestation from August 2020 to July 2021 was the highest since 2012 and represented a 57% increase from the year before. 

This destruction is usually justified for economic gain, particularly for the agricultural sector. Beef and soy production are behind more than two-thirds of Amazon's habitat loss.

“[W]e've all been aware that market demand for agricultural commodities is the biggest driver of tropical deforestation,” Daniel Zarin, Executive Director of Forests and Climate Change at the Wildlife Conservation Society, says in the press call. “And that Brazilian agribusiness is a global powerhouse in meeting that market demand and then contributing to that deforestation.” 

Deforestation has ramped up under the leadership of current Brazilian President Jair Bolsonaro, who has been criticized both at home and abroad for pro-extractive policies.

Bolsonaro has countered by arguing that Brazil has the right to use its resources as it sees fit. In responding to a global outcry over devastating fires in 2019, he told the United Nations that the global pressure amounted to an attack on Brazilian sovereignty. 

However, the fact that deforestation is driven by agricultural demand creates a paradox: Crops need rain, and that is precisely what the forest provides. That means Amazon deforestation will ultimately harm Brazilian agriculture. 

“In the Brazilian context, we'd call this an own goal, that is when you score against your own team,” Zarin says. “This is not a winning strategy.”

Climate Regulators 

The reason deforestation represents an “own goal” is that forests aren’t just important for the global climate. 

“[F]orests do a lot more than store CO2,” University of Virginia environmental science professor Deborah Lawrence explains in the press call. “They are critical climate regulators. They keep us cooler every day, protecting us against extreme heat, maintaining rainfall, and controlling the flow of water across and through our lands.”

Lawrence, who co-authored a 2014 paper on the impacts of deforestation on climate and agriculture in the tropics, says that forests regulate the local climate in four ways.

1. They convert the sun’s energy into water vapor, acting as a natural air conditioner.
2. Their height interrupts wind flow, creating turbulence that lifts heat.
3. They shed organic particles that enter the atmosphere and form clouds that generate rain.
4. They release chemicals called biogenic volatile organic compounds, including secondary organic aerosols that reflect sunlight. 

Overall, these impacts mean that forests may keep the surrounding area half a degree cooler than it would be otherwise. And, as the science highlighting the difference between 2.7 and 3.6 degrees Fahrenheit (1.5 and 2 degrees Celsius) of global warming shows, half a degree can matter quite a lot. This is particularly the case in the tropics. 

“Extreme heat of just a few degrees, especially in a place like the tropics can mean the difference between heat stress and heat stroke,” Lawrence says. “It is seriously extreme heat that kills people, livestock and crops.”

Double Cropping

The Planet Tracker report focused on how the Amazon’s role as local climate regulator impacts an essential component of Brazilian agriculture: the practice of double cropping. 

Brazil is currently the world’s No. 2 exporter of soy (behind the U.S.) and the No. 3 exporter of maize (behind the U.S. and Argentina). However, this success depends on the practice of double-cropping: growing maize and soy on the same patch of land in the same year. 

This practice requires a stable climate, report co-author and Planet Tracker Director of Fixed Income and Head of the Land Use Programme Peter Elwin explains in the call.

“Now you can imagine you're growing soy, you plant that in the field,” he says. “You wait for it to harvest, chop it down, take it out of the field, and then you plant your maze and then you do the same with the maize and wait for that to grow and get harvested. Now to do that, you need predictable weather patterns, predictable rainfall. You need the same amount, but you also need it to fall in similar ways, particularly for that second crop.”

However, as deforestation persists, these stable weather patterns are changing, altering the timing and the amount of rain. This is a problem because double-cropping means everything must be planted on a tight schedule. There is no wiggle room to wait for a delayed rainfall, for example. 

However, if farmers respond to the changing weather patterns by clearing more land, it will create a “feedback loop” that will only harm both forests and farms, the report concluded. This would have direct economic impacts. Losing the maize crop could cost an average-sized farm in Brazil’s Mato Grosso region a third of its yearly income. On a national level, export revenues from Mato Grosso and the region of MATOPIBA could decrease by $2.1 billion by 2050, equal to 6% of Brazil’s total export revenues for soy and maize in 2018.  

“It's Brazil shooting itself in the foot by consuming this natural resource, which is ultimately what it relies on for economic success,” Elwin says.  

Planet Tracker is a think tank that seeks a world in which markets operate in harmony with planetary boundaries. To that end, many of the report’s recommendations focused on financial institutions. It argued that sovereign bond investors should put pressure on the Brazilian government to halt deforestation, by promoting policies like: 

1. Reversing cuts to the Ministry of Environment
2. Strengthening existing laws to prevent illegal deforestation
3. Ratifying the Escazu Agreement to protect Indigenous rights in the Amazon
4. Considering a Deforestation-Linked Sovereign Bond that would attach payments to forest protection.

The report also encouraged investors in Brazilian businesses, banks, and other companies that include Brazilian agricultural products in their supply chains to push for deforestation-free corporate policies. 

However, Elwin also expressed hope that the Brazilian government would take note of Planet Tracker’s findings. 

“I think the key thing that we would want to see is the Brazilian government itself actually engaging with the concept that they are harming their future prosperity,” Elwin says.