Revista de Economia e Sociologia Rural
https://revistasober.org/article/doi/10.1590/S0103-20032005000400003
Revista de Economia e Sociologia Rural
Research article

The economic and environmental impact of trade in forest reserve obligations: a simulation analysis of options for dealing with habitat heterogeneity

Kenneth M. Chomitz; Timothy S. Thomas; Antônio Salazar P. Brandão

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Abstract

A tradeable development rights (TDR) program focusing on biodiversity conservation faces a crucial problem: defining which areas of habitat should be considered equivalent. Restricting the trading scope to a narrow area could boost the range of biodiversity conserved but could increase the opportunity cost of conservation. 
The issue is relevant to Brazil, where TDR-like policies are emerging. Long-standing laws require each rural property to maintain a legal forest reserve (reserva legal) of at least 20%, but emerging policies allow some tradeability of this obligation. This paper uses a simple, spatially explicit model to simulate a hypothetical state-level program. We find that wider trading scopes drastically reduce landholder costs of complying with this regulation and result in environmentally preferable landscapes.

Keywords

Brazil, conservation, environment, land use, Minas Gerais, tradeable development rights
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