Line-by-Line Email Conversation about Amazon

Dear Brett,

You are to be commended on selecting an interesting and complicated topic for your research. Some brief, and probably incomplete, answers...

At 12:05 PM 9/3/2008, you wrote:
Dr. Merry - I am a student at the University of Kansas, and am doing an extensive study of the impact of US agricultural subsidies and support. One area that is of keen interest to me is the support to the domestic biofuel sector - specifically, the tariff on imported sugarcane ethanol from Brazil. I'm considering writing a policy proposition, and am hoping that you will have some thoughts or guidance.

First, do you think that lifting the tariff would have a negative impact on the Amazon? Even if farmers don't grow directly on Amazonian land, does expanded demand have the potential to push cattle ranchers or small farmers into the Amazon?

No, I don't think lifting the tariff will have a massive direct negative impact on land use in the Amazon. This is mostly because there are barriers or conflicts that may dampen the direct link between the ethanol tariff and land use in the Amazon.

Some questions that lead to uncertainty in the land use response would be something along the lines of....How much of the US market share can the Brazilian producers expect to capture? How will removal of tariffs affect the demand for ethanol? How will this reflect in local prices for this and alternative products for that land area, as well as for market substitutes?

Secondly, while there will be a strong push in the future for ethanol from sugarcane, there is a large productive area to be used and there are efficiencies in cattle production (in particular) that may increase intensity from 1 to 2 or 3 head per ha. So the impact will not be a replacement of 1 ha of added sugarcane for one ha of forest. While we may see additional pressure, the markets for carbon credits, stronger governance, and better monitoring will all play into determining the eventual land use change (or status).


Second (and probably contingent), should the United States establish a form of quid pro quo with the Brazilian government? I haven't seen much literature on this, but it seems like the United States could make a reasonable demand that: "we will only lift the tariff if you agree to increased protection of the Amazon against agricultural invasion." Do you think that this is feasible, and what do you think the reaction of the Brazilian government would be?


I think that this would be absolutely infeasible. How would you measure it? It is inefficient from an economic perspective and finally, given that the US is the largest emitter of greenhouse gasses, a difficult negotiating position.

best wishes,
Frank