Environmental Economics and Policy Making in Developing Countries

Environmental Economics and Policy Making in Developing Countries

Current Issues

Edited by Ronaldo Seroa da Motta

The authors provide a comprehensive analysis of topics varying from the general problems of growth and conservation to specific applications such as; pollution costs, environmental taxation, deforestation and climate change. This volume also offers policymakers a comprehensive view of the challenges they face, and the legacies they leave, in order to convert environmental policy making into an actual programme of welfare improvement.

Chapter 8: Technology, climate change,productivity and land use in Brazilian agriculture

Robert E. Evenson and Denisard C.O. Alves

Subjects: development studies, development economics, economics and finance, development economics, environmental economics, environment, environmental economics


8. Technology, climate change, productivity and land use in Brazilian agriculture Robert E. Evenson and Denisard C.O. Alves 8.1 INTRODUCTION The ‘Ricardian’ model of land productivity has been applied to Brazil by Sanghi et al. (1997) and Sanghi and Mendelsohn (2000). Since land productivity is associated with land use (that is, the use of land for crops, pasture and forestry) there is a natural extension for the Ricardian model to a land use analysis.1 The original application of the Ricardian model to land productivity did not explicitly consider spatial differences in technology. Implicitly the climate change estimates obtained assumed that the technology available to farmers at the time of the census observations would continue to be available during the climate change simulation period. Sanghi et al. (1997) and Sanghi and Mendelsohn (2000) examine how climate in different places of Brazil affects the net rent or value of farm land. Doing so enables them to account for both the direct impacts of climate on yields of different crops as well as the indirect substitution of different activities, introduction of different activities, and other potential adaptation to different climates. Using Brazilian municipio level data they estimate the effect of climatic variables and a variety of geographical, soil, economic and demographic factors to determine the intrinsic value of climate on farmland. Their analysis suggests that climate has a systematic impact upon agricultural rents and thus costs through temperature and precipitation. They also suggest that these effects tend to be very non-linear and quite...

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