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DETERring Deforestation in the Amazon: Environmental Monitoring and Law Enforcement
The study finds that environmental monitoring and law enforcement effectively reduced deforestation in the Brazilian Amazon. Using DETER cloud coverage as an instrumental variable to address endogeneity, the authors estimate that reducing monitoring and law enforcement by half would increase municipal deforestation by approximately 44%. The analysis indicates that these efforts did not cause deforestation to leak into neighboring areas and did not negatively impact local agricultural production; in fact, agricultural outcomes improved. A cost-benefit analysis suggests the strategy was cost-effective, with a break-even price of USD 0.69/tCO2, significantly below prevailing carbon prices.
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Document type: Research paper