People I (Mostly) Admire 53. The Simple Economics of Saving the Amazon Rainforest
Nov 27, 2021
Michael Greenstone, former Chief Economist for the Obama administration, and Gretchen Daly, a leading Professor at Stanford, discuss the intricate relationship between economics and the Amazon rainforest crisis. They argue that traditional moral pleas often miss the root causes of deforestation. The duo emphasizes innovative economic strategies for conservation, such as carbon pricing and the significance of natural capital. They draw on global examples, highlighting lessons from China and Brazil, to showcase how financial incentives can effectively combat environmental degradation.
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Amazon Deforestation and Climate Change
- The Amazon rainforest, the world's largest forest, stores immense carbon, crucial for climate change mitigation.
- Deforestation, primarily in the Brazilian Amazon, has already shrunk the forest by almost 20%.
Brazil's Deforestation History
- Between 1970 and 2005, Brazil's deforestation rates were alarmingly high, but improved under President Lula da Silva.
- Deforestation is now rising again under President Bolsonaro, who has rolled back protections.
Economics of Deforestation
- Deforestation is driven by economic needs, with cattle ranching being the dominant industry.
- The Amazon's poor soil and remote location make it unsuitable for cattle, showcasing market failure.