A Look at Amazon Basin Seasonal Dynamics with the Biophysical ...

THE ECONOMIC COSTS OF FIRE IN THE BRAZILIAN AMAZON: A VALUATIONSTUDYMaria del Carmen Vera DiazInstituto de Pesquisa Ambiental da Amazônia – IPAM, Belem, PA, BrazilDaniel C. NepstadIPAM and Woods Hole Research Center – WHRC, Woods Hole, MA, USARonaldo Seroa da Motta & Mário Jorge Cardoso de MendonçaInstituto de Pesquisa Econômica Aplicada –IPEA, Rio de Janeiro, RJ, BrazilFire is used to manage pastures and prepare agricultural soils by more than 400 thousandsmall farmers in the Brazilian Amazon. The economic system considers, exclusively, thebenefits obtained from use of fire as a management tool. However, when fires burn beyondtheir intended boundaries, they also cause losses to rural property owners and generateexternalities to society (CO 2 emissions and respiratory diseases). The risk of uncontrolledfire inhibits property owners from investing in their properties, perpetuating extensive cattleranching and slash and burn agriculture domination at the expense of agroforestry systemsand sustainable forest management. The objective of this work is to estimate the economicimpacts of fire in the Amazonia for society as a whole and for rural property owners. Suchimpacts include burned grassland (lost grazing), forest and plantations, lost fences, C0 2emissions and respiratory diseases. Physical and monetary costs resulting from fire inAmazonia were estimated using the theoretical structure of environmental economics. Theaverage annual minimum costs associated with fire are US$ 800 million, and range from1.5 to 4.0 percent of the region’s GDP. The costs are distributed as follows: 9.4 percent indamages to the farmers, 89.7 percent in CO 2 emissions, and 0.9 percent in respiratorydiseases as a result of smoke inhalation. These estimates provide a preliminary assessmentof the social costs of regional development models that favor accidental fire.Address of corresponding author (Diaz):Instituto de Pesquisa Ambiental da Amazônia – IPAMSede BelémAv. Nazare 669, Centro.66035-170 Belém, PA, Brasilemails:mcarmen@amazon.com.brdnepstad@whrc.orgseroa@ipea.gov.br