1. Aspects of governance and agricultural expansion in tropical Latin America: Jevons paradox or sustainable intensification? Graziano Ceddia – MU Vienna Sabine Sedlacek – MU Vienna Nicholas Bardsley – University of Reading Sergio Gomez y Paloma – EC JRC IPTS Seville

2. Outline  Deforestation Trends  Drivers of Deforestation  Agricultural Productivity & Deforestation  The Quality of Governance & Deforestation  The Jevons Paradox  Research, Data & Methods  Results  Conclusions 2© 2011 MODUL University Vienna

3. Deforestation Trends Subregion Area (1000 ha)Annual change rate (%) 1990200020101990-20002000-2010 Caribbean 5,9016,4336,9320.870.75 Central America 25,71721,98019,499-1.56-1.19 South America 946,454904,322864,351-0.45 Total Latin America 978,072932,735890,782-0.47-0.46 World 4,168,3994,085,0634,032,905-0.20-0.13 3© 2011 MODUL University Vienna Source: State of the World‘s Forest Resources 2011 (FAO)

4. Drivers of Deforestation Indirect driversDirect drivers 4© 2011 MODUL University Vienna Source: Millennium Ecosystem Assessment

5. Agricultural productivity & Deforestation  World population is expected to reach 9 billion by 2050  Food security requires to increase crop production, without compromising the environment  Over the past 40 years most of the increase in agricultural output has come from increased yield rather than land expansion (FAO)  Wheat yields: +208%  Corn yields: +157%  Rice yields: + 108%  Yield increase has been associated to both agricultural expansion (Jevons paradox) and contraction (land-sparing) 5© 2011 MODUL University Vienna

6. The Quality of Governance & Deforestation  Institutional aspects and the quality of governance can play a significant role in explaining agricultural expansion and deforestation  Broad governance: measures of the effectiveness of the state to enforce property rights, administer the law etc.  Empirically the effect of better governance remain ambiguous  Environmental governance: measures the effectiveness of the state to protect the environment  Empirically better environmental governance appears to slow down agricultural expansion 6© 2011 MODUL University Vienna

7. What's a Jevons Paradox anyway?  Agricultural intensification would require a smaller area to produce the food necessary to feed the world population… ...distributional issues are neglected and...  Jevons paradoxes are ignored! " It is wholly a confusion of ideas to suppose that economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth " (Jevons, 1866 p. 123) 7© 2011 MODUL University Vienna

8. Research question, Data & Methods  We hypothesize that occurrence of land-sparing vs. Jevons paradox, critically depends on the interaction between the quality of governance and agricultural intensification  We also control for a number of socio-economic factors  Agricultural trade  Service on external debt  Per-capita GDP  Population 8© 2011 MODUL University Vienna

9. Research question, Data & Methods  FAO and World Bank data for 6 Southern American countries (Bolivia, Brazil, Colombia, Paraguay, Peru and Venezuela) over the period 1970- 2006  Broad governance indicators provided by the World Bank over the period 1996-2006:  Corruption Control  Rule of Law  Accountability  Environmental governance indicators:  % of the land area under environmental protection, 1990-2006 (WDPA)  Environmental Sustainability Index, 2005 (YCELP)  Environmental Performance Index, 2000-2006 (YCELP) 9© 2011 MODUL University Vienna

10. Research question and Data Set 10© 2011 MODUL University Vienna

11. 11© 2011 MODUL University Vienna VariablesModel 1 (GOV=CORC) Model 2 (GOV=ROL) Model 3 (GOV=ACC) Log(AOHA)-0.711*** (0.171) -1.212*** (0.163) -0.971*** (0.108) Log 2 (AOHA)0.073*** (0.019) 0.149*** (0.019) 0.102*** (0.011) Log(POP)1.406** (0.453) 1.568*** (0.381) 3.358*** (0.327) Log 2 (POP)0.006 (0.016) -0.0003 (0.014) -0.068*** (0.011) Log(GDPC)49.804*** (7.316) 30.104*** (6.904) 4.990 (5.754) Log 2 (GDPC)-6.596*** (0.965) -3.988*** (0.911) -0.626 (0.761) Log 3 (GDPC)0.290*** (0.042) 0.175*** (0.040) 0.026 (0.033) Log(EX)0.066 (0.044) 0.099* (0.038) 0.054 a (0.028) Log 2 (EX)-0.004 (0.006) -0.009 a (0.005) -0.006 (0.004) Log(PEDS)-0.119 § (0.065) -0.157** (0.055) -0.142*** (0.041) Log 2 (PEDS)0.003 (0.016) 0.003 (0.014) 0.001 (0.010) Log(AVA)-0.029 (0.048) -0.048 (0.042) -0.081* (0.032) Log(PEDS)×Log(AVA)0.054** (0.019) 0.067*** (0.016) 0.059*** (0.012) GOV×AOHA0.001*** (0.0004) 0.003*** (0.0003) 0.004*** (0.0003) Constant-137.592*** (17.849) -88.260*** (16.863) -37.207** (13.690)

12. 12© 2011 MODUL University Vienna Variables Model 4 (GOV=PA) Model 5 (GOV=ESI) Model 6 (GOV=EPI) Log(AOHA) -0.709*** (0.154) -1.780*** (0.309) -1.308*** (0.192) Log 2 (AOHA) 0.070*** (0.016) 0.246*** (0.047) 0.168*** (0.025) Log(POP) 0.339 (0.410) 0.276 (0.426) 0.198 (0.400) Log 2 (POP) 0.036* (0.016) -0.009 (0.015) 0.026 a (0.015) Log(GDPC) 42.825*** (7.139) 47.461*** (7.172) 38.492*** (7.062) Log 2 (GDPC) -5.680*** (0.941) -6.314*** (0.944) -5.115*** (0.931) Log 3 (GDPC) 0.249*** (0.041) 0.278*** (0.041) 0.225*** (0.041) Log(EX) 0.082 a (0.042) 0.069 (0.043) 0.083* (0.040) Log 2 (EX) -0.005 (0.006) -0.004 (0.006) -0.006 (0.006) Log(PEDS) -0.123* (0.060) -0.050 (0.060) -0.100 a (0.058) Log 2 (PEDS) 0.006 (0.015) -0.002 (0.015) 0.006 (0.014) Log(AVA) -0.020 (0.046) -0.009 (0.047) -0.029 (0.044) Log(PEDS)×Log(AVA) 0.052** (0.017) 0.034* (0.017) 0.044** (0.016) GOV×AOHA -0.00003*** (0.000005) -0.00009*** (0.00002) 0.00006*** (0.000008) Constant -110.699*** (17.961) -111.576*** (18.824) -93.523*** (18.159)

13. Results – Broad Governance 13© 2011 MODUL University Vienna Elasticity of Agricultural Area with respect to Agricultural Intensification (AOHA) GOV=ROL Max Mean Min GOV=CORC Max Mean Min

14. Results – Broad Governance 14© 2011 MODUL University Vienna GOV=ACC Max Mean Min Elasticity of Agricultural Area with respect to Agricultural Intensification (AOHA)

15. Results – Environmental Governance 15© 2011 MODUL University Vienna Elasticity of Agricultural Area with respect to Agricultural Intensification (AOHA) GOV=ESI Max Mean Min GOV=PA Max Mean Min

16. Results – Environmental Governance 16© 2011 MODUL University Vienna GOV=EPI Max Mean Min Elasticity of Agricultural Area with respect to Agricultural Intensification (AOHA)

17. Additional Results  The elasticity of agricultural land with respect to per-capita GDP is highly non-linear but ultimately positive  Economic growth per-se is not a solution to further agricultural expansion  The elasticity of agricultural land with respect to agricultural export is positive and significant  The elasticity of agricultural land with respect to the service on external debt is positive and significant  The elasticity of agricultural land with respect to population is also positive and significant 17© 2011 MODUL University Vienna

18. Conclusions  The results indicate that the interaction between the quality of government/governance and agricultural intensification and the type of governance considered are important to understand the occurrence of Jevons paradox or land-sparing  When considering Broad Governance indicators, a Jevons paradox emerges for high governance scores  Polanyi and the relationship between the state and the market?  When considering the environmental governance, land-sparing occurs for high scores of the governance indicators  Agricultural intensification may be necessary to achieve food security, but one must pay attention to its possible interactions with other policies aiming at improving governance/government  The introduction of a cap on agricultural land and/or strengthening environmental protection measures could be more effective 18© 2011 MODUL University Vienna

19. Future Research  The results provide interesting hypothesis....  How does governance quality actually interacts with intensification to produce the observed results?  How do different aspect of governance actually shape agricultural expansion/contraction?  How does inequality in the distrubution of land/assets/wealth affect such patterns?  What is the effect of different land tenure systems?  To answer such questions further research, which incorporates also significant case studies, is needed! 19© 2011 MODUL University Vienna

20. Thank you! 20© 2011 MODUL University Vienna