The drivers and price effects of the loss of nature in Brazil

Two new papers from our group, both funded by the ERC DOMESTIC project, reveal the key role of Brazilian companies and consumers in tackling deforestation.

In Environmental Research Letters, Damares Lopes Afonso and colleagues built an economic model of the Brazilian economy that traced the loss of natural vegetation in all six of Brazil’s biomes to 36 downstream economic sectors. Most conversion (73%) was linked to domestic supply chains, and 27% to exports. Importantly, this conversion included not just forests, but also savannahs, wetlands and grasslands across Brazil. The results highlight the importance of tracing impacts along domestic supply chains, identifying the downstream sectors - such as the retail, Horeca, and dairy sectors - which drive the loss of nature.

In The Lancet Planetary Health, Jacqueline Tereza da Silva and colleagues focused on the price effects of this deforestation, tracing the origin and impact of 2,980 supermarket beef products. In a preregistered analysis, they found that beef with large and small deforestation footprints were sold side-by-side at similar prices in supermarkets. They estimate that eliminating deforestation would raise beef prices by about 3.5%, well below annual rate of inflation - a huge opportunity to cut deforestation and greenhouse gas emissions at little cost to consumers.

Articles:

• Environmental Research Letters paper
• The Lancet Planetary Health paper