'Causes of Deforestation of the Brazilian Amazon' is part of the World Bank Working Paper series. The report suggests that, in contrast to the 1970s and 1980s, when occupation of Brazilian Amazonia was largely induced by government policies and subsidies, recent deforestation in significant parts of the region is basically caused by medium- and large-scale cattle ranching.
Among the causes of the transformation are technological and managerial changes and the adaptation of cattle ranching to the geo-ecological conditions of eastern Amazonia, which allowed for productivity gains and cost reductions. The fact that cattle ranching is viable from the private perspective does not mean that the activity is socially desirable nor environmentally sustainable. Private gains need to be contrasted with the environmental (social) costs associated with cattle ranching and deforestation.
It is also argued that the private benefits from large-scale cattle ranching are largely exclusive, having contributed little to alleviate social and economic inequalities. However, decreases in the price of beef in national markets and increases in exports caused by the expansion of cattle ranching in Eastern Amazonia may imply social benefits that go beyond sectoral and regional boundaries.
The paper provides a social evaluation of deforestation in Brazilian Amazonia by, on the one hand, identifying the main agents involved in the process, the economic motives behind their activities and their possible economic returns and, on the other hand, undertaking a monetary evaluation of the economic (social) costs of deforestation while making some comparisons with sustainable forest management. It presents and compares a number of different scenarios and proposes recommendations for the region.