The Economic Costs of Fire in the Amazon

Abstract

Fire has been traditionally used by farmers as mean of land preparation and, therefore, benefiting agriculture and pasture. However, fire application may also generate private and social costs. This study attempts to measure these fire use costs in the Brazilian Amazon. Fire control can be lost and damage cultivated and pasture land and other farm's assets. Uncontrolled fire may also reach forestland leading to significant losses on forest services. Apart from that, fire smokes also increase respiratory disease incidence affecting people's health. Our study covered costs related to pasture accidental fire, losses on fences, carbon storage and health impacts. Our most conservative estimates indicate an average cost value of US$ 102 millions or around 0.2% of the region GDP during the 1996-1999 period. Depending on how carbon release is valued, this GDP percentage can be of up to 9%. Such figures are already indicating that there must be trade offs to be achieved in reducing, preventing or improving the use of fire in the region.

Note: The downloadable document is in Portuguese.

Keywords: Forest burning, Fire use cost, Carbon emission, Health damages, Panel data

JEL Classification: I1, O1, Q0, Q1, Q2