Tropical Deforestation in the Amazon:

Tropical forests are a unique environmental resource that provide numerous global benefits. Of the world’s biomes, they provide the greatest biological diversity of plants and animals. It is estimated that these forests contain at least fifty percent of the world’s animal species and almost seventy five percent of the world’s plant species. Increased deforestation is likely to reduce this biodiversity and will result in many other negative impacts such as soil erosion, nutrient depletion, flooding, increased levels of greenhouse gases, disturbances in the carbon cycle and loss of forest products such as pharmaceuticals, timber and fuel. In regions like the Brazilian Amazon, where the largest portion of the world’s tropical forests is located, concern regarding deforestation has arisen because the current rate has accelerated to approximately 8000 hectares each year (Lui and Lu, 1992); (Dale and Pedlowski, 1992). The practice of agroforestry methods by farmers in some regions of the Amazon is thought to be a sufficient way to minimize the area of cleared forest while still allowing them to provide for themselves and their families. Therefore, minimizing the amount of land farmers use for agricultural production and ranching can reduce the amount of deforestation without a loss in total output (Caviglia and Kahn, 2001). To understand what factors drive farmers to deforest land, this paper uses empirical data to estimate different household land use alternatives in Rondonia, Brazil. Rondonia is chosen as the focus of this paper due to its accelerated deforestation rate and because data from this area is readily available. Based on the results presented, policy recommendations can be developed that may help to reduce deforestation levels