1. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University CEnREP – Camp Resources 2011 Pedro Pires de Matos* Erin O. Sills NC State University Environmental Law in the Amazon: Testing Impacts on Land-Use Dynamics using Spatial Panel Models * Corresponding author: pedro_matos@ncsu.edu Wrightsville Beach NC, August 7-9

2. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Deforestation in the Brazilian Amazon Environmental Law Outline Data Econometric Models for Spatial Panels Results

3. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Deforestation in the Amazon 12% - 30% (van der Werf, 2009 – FAO, 2006)

4. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Deforestation in the Amazon The “Arc of Deforestation”

5. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Annual loss of forest cover in the Brazilian Legal Amazon Source: INPE 2011 Deforestation in the Amazon Km2 Source: Mongabay.com, 2011 Small-scale agriculture (20-25%) Cattle ranching (65-70%) Large-Scale agriculture (5-10%) Other 1-2%) Logging (2-3%) Causes of deforestation in the Brazilian Amazon, 2000-2005

6. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University The first Forestry Code was created with Federal Decree N. 23.793, from 1934. The concept of Legal Amazon was created in 1953 (Federal Law 1.806). The Forestry Code was substantially revised by Federal Law n. 4.771, from 1965. Defines small properties: Small property in Legal Amazon <150 ha. Minimum of 80% of household income from agro-forestry or extraction. Defines Permanent Protection Areas (Área de Preservação permanente – APP): Protect water resources, soil, landscape, biodiversity and population’s wellbeing. Defines Legal Reserve (Reserva Legal – RL): Preserve ecosystems and biodiversity. Environmental Law in Brazil

7. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University APP – Protect resources and provide ecosystem services River margins (riparian corridors) Lakes and other bodies of water Water springs Top of hills and mountains Steep hillsides (> 45 degrees) High erosion areas High altitude areas (> 1800m) Urban green areas (e.g. protection of highway corridors) RL – Preserve ecosystems and biodiversity 80% of rural properties’ area in the Legal Amazon Lowered to 50% for deforested properties RL can be shared by several lots and be located in a different place within the same hydrographical basin Environmental Law in Brazil

8. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University APP – Protect resources and provide ecosystem services River margins (riparian corridors) Lakes and other bodies of water Water springs Top of hills and mountains Steep hillsides (> 45 degrees) High erosion areas High altitude areas (> 1800m) Urban green areas (e.g. protection of highway corridors) RL – Preserve ecosystems and biodiversity 80% of rural properties’ area in the Legal Amazon Lowered to 50% for deforested properties RL can be shared by several lots and be located in a different place within the same hydrographical basin Environmental Law in Brazil

9. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University The question: Are these legal instruments effective? The research question The answer: YesNoIt depends An economist’s default answer X

10. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Study Area 9392 Lots 20 Km0

11. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Total area per land use/land cover Data

12. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University 1984 Data 1996 20002005 2009 Forest cover as percentage of lot area

13. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University The question: Are these legal instruments effective? The research question The answer: YesNo X The “actual” research question: Are these legal instruments affecting land use/land cover change dynamics? (i.e. do farmers alter their behavior around legally defined minimum forest cover levels?) It depends An economist’s default answer

14. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Data

15. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Age of Lot First occupation Lot settlement year 2/3 consecutive years: Visible pasture > 0.5 ha Decrease in forest > 0.5 ha Visible urban class Spatially weighted Spatial weighting Locate 10 nearest neighbours (NN) If age gap between lot and youngest of 8 NN > 10 y Assign that age to lot Official Date (INCRA)

16. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Market access Distance to main city Distance to nearest market

17. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Key variables RiversForest Cover 2000

18. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Spatial panel models t

19. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Random effects Spatial panel models Pooled cross sections Fixed effects

20. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Spatial panel models Spatial Lag Model (SLM) Spatial Error Model (SEM)

21. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Spatial panel models Spatial Durbin Model (SDM) Generalized Spatial Model (GSM)

22. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University The Model

23. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Results

24. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Results

25. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Results

26. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Conclusions and ongoing work Environmental legislation is not effective...... but farmers appear to “acknowledge” its presence. Policy implications: Improved enforcement decelerates deforestation (obvious). Enforcement above incentives/subsidies (e.g. REDD+)? Working with sub-samples and additional covariates. Incorporating HH survey data.

27. CEnREP Camp Resources 2011 Pires de Matos, Sills, NC State University Thank you for your time. Questions? CEnREP – Camp Resources 2011 Wrightsville Beach NC, August 7-9 Erin O. Sills Pedro Pires de Matos* NC State University * Corresponding author: pedro_matos@ncsu.edu Environmental Law in the Amazon: Testing Impacts on Land-Use Dynamics using Spatial Panel Models