How does European soy import affect the deforestation of the Amazon?

This thesis investigates how European soy import affects the deforestation of the Amazon through regression analyses and interpretation of previous studies and background information on the topic. The dataset that has been analysed was retrieved from Trase.earth and contained a comprehensive setup of the supply chain for soy produced and exported from municipalities in Brazil to European importing countries. The regression model was conducted by using territorial deforestation risk in hectare as the dependent variable and soy export equivalent tonnes as the independent variable. We use fixed effect estimator of year and municipality. Additionally, the standard errors are clustered on municipality level to consider correlation over time and solve potential problems related to heteroskedasticity and serial correlation. Our analysis shows a statistically significant relationship between territorial deforestation risk in the Amazon and soy exported from municipalities in Brazil to Europe. It is also evident that the Soy Moratorium contributed to lower territorial deforestation risk rates through European soy import. Furthermore, we find the companies in the supply chain for soy export from municipalities in Brazil to Europe to reduce the deforestation risk rates of the Amazon after the implementation of the Soy Moratorium. We find a statistically significant result, where the impact of zero deforestation committed companies and companies who are not committed to zero deforestation had reduced the deforestation risk. Lastly, we find a decrease in the territorial deforestation risk in the neighbouring biome the Cerrado, where we originally expected to find a spillover effect. This is an indication that the Soy Moratorium had an indirect effect on the Cerrado