ABSTRACT
Based upon cross-section data at municipal level, this chapter specifies, estimates, and simulates an econometric model of Brazilian Amazon deforestation. Since one of the main concerns relating to deforestation is the release of carbon dioxide (CO2), it simulates the contribution of Amazon deforestation to carbon releases. The model consists of three blocks of equations. In the first, deforestation — distinguished by vegetation types — is determined by major economic activities. In the second, the relationship between vegetation type and biomass content determines carbon dioxide emissions caused by deforestation. Finally, in the third, the growth rates of population and of major economic activities are assumed to depend only on their respective spatial densities, thus allowing projections and simulations of the geographic distribution of economic activities, and their effects on deforestation and CO2 emissions. Spatial autocorrelation for the logarithms of densities of deforestation, population and major economic activities are about the same and significantly higher than the coefficients obtained for growth rates.
