The worldwide trend in tropical forest loss has been increasing overall since the 2000s. This imposes real social costs, such as through higher greenhouse gas emissions, diminished biodiversity, and harm to livelihoods and health. Market failures drive deforestation beyond the socially optimal level, as private land-use decisions do not internalize the full utility of intact forests or the external costs from clearing. To correct these failures, policymakers have three main mechanisms: (i) raising the private costs of clearing, (ii) increasing the private utility of keeping forests, and (iii) reducing the utility of alternative land uses. Policies that influence these mechanisms may generate additional outcomes beyond avoided deforestation, which have often been overlooked and remain insufficiently studied. This dissertation analyzes the positive secondary effects of conservation policies, the co-benefits, in the Brazilian Amazon to provide a more comprehensive assessment of policy performance and impacts. The empirical strategy relies on counterfactual impact evaluation, combining high-resolution satellite data on land cover, fires, air pollution, and climate with administrative and socioeconomic records on agricultural production, trade flows, environmental enforcement, and health. Identification draws on quasi-experimental methods, including the generalized synthetic control method for staggered policy rollout, instrumental variables that exploit exogenous variation in satellite-based monitoring effectiveness, and an approach based on differences in spatial discontinuities. The results show that policy instruments that increase environmental scrutiny---through public disclosure of high-deforestation municipalities, strengthened monitoring and enforcement, and restricted market and credit access for non-compliant production---reduce deforestation and forest-to-pasture conversion. At the same time, the expansion of profitable soybean cultivation shifts towards already-cleared areas, consistent with land-saving intensification rather than at the expense of forests. Local labor markets, wages, and credit availability adjust accordingly to this sustainable transformation, which is associated with productivity gains. Traders mitigate risks along the supply chain by exporting towards destinations less sensitive to imported-deforestation concerns. Conservation policies also deliver substantial health co-benefits: reductions in clearings and burnings lower fine particulate air pollution and avoid associated hospitalizations and deaths. Taken together, the evidence indicates that well-designed conservation policies can curb deforestation while generating multiple co-benefits. At the same time, both co-benefits and trade-offs are context dependent and likely heterogeneous. Recognizing and explicitly incorporating this heterogeneity into policy design and evaluation can improve the targeting and effectiveness of interventions, help protect vulnerable groups, and ensure a more equitable distribution of gains. Clearly communicating co-benefits and trade-offs could also help strengthen public, economic and political support for forest conservation.
Yannic Damm (Thu,) studied this question.