Los efectos económicos y sociales que la pandemia del COVID-19 y las medidas asociadas para hacerle frente están teniendo en América Latina pueden derivar en serias consecuencias de largo plazo que repercutirían en el logro de los Objetivos de Desarrollo Sostenible (ODS). En este artículo, resultado de la colaboración de economistas ambientales de ocho países de la región, discutimos los posibles efectos de la pandemia en la contaminación del aire, la deforestación y otros aspectos ambientales relevantes relacionados con los ODS. Además de presentar un recuento de algunos de los efectos iniciales de la crisis sanitaria en el medio ambiente, discutimos efectos potenciales en términos de regulaciones ambientales e intervenciones de política pública. Por último, presentamos una agenda sobre nuevos temas de investigación que surgen a raíz de la pandemia o que han cobrado mayor importancia como consecuencia de esta, incluyendo los impactos sobre el logro de los ODS.

COVID-19 is currently having major short run effects with possible serious long run implications for the environment and the management of natural resources in Latin America. We discuss the possible effects of the pandemic on air pollution, deforestation and other relevant environmental dimensions across the region. With contributions from environmental economists from eight countries, we give an overview of the initial and expected environmental effects of this health crisis. We discuss potential effects on environmental regulations, possible policy interventions, and an agenda for future research for those interested in the design and evaluation of environmental policies relevant for the Latin American context.

This study investigates the mechanics of international trade and CO2 emissions in two blocs of countries (North' and South') by analyzing data from the World Input-Output Database. We adapt the Miyazawa technique to estimate the linkages between international trade and the environment at a global scale. Therefore, this study is in line with the idea of highlighting the role of feedback effects as well as the nature and extent of extra-regional influences on an economy in response to an additional stimulus. This is a contribution that, to our best knowledge, has not yet appeared in the literature. Our results suggest that both the North and the South have become less pollution-intensive (technique effect) over the years. Interestingly and in contrast to much of the literature, we also find support to the hypothesis that the South has specialized in relatively more pollution-intensive activities (composition effect).

We analyze potential efficiency gains in wind power projects by comparing counterfactual investment decisions in two different scenarios under a real options framework. The first scenario is a standard wind power investment, where the investor rents the land from local farms. In the second scenario, the wind power investor buys the land and commercializes both electricity and crop production, thus reducing the revenue risk through the diversification. Both scenarios have a waiting option, with the wholesale prices leading the installation decision. We model the electricity price as a mean reverting process with jumps and with different jumping probabilities for the different seasons of the year. Corn prices follow a mean reverting process. The waiting flexibility was modeled as a bundle of European options. The results indicate that the waiting option is exercised in 100% of our simulations in both scenarios, suggesting the still important role of government policies to stimulate wind power. More importantly, in more than 90% of the simulations, the second scenario brought value to the investment. Furthermore, net present values are more sensitive to reductions in capital costs than electricity prices. These results can form the basis for more effective policies for the wind power sector.

Tropical deforestation increases carbon emissions, reduces carbon sinks, simplifies ecosystems, affect soil quality, can eliminate endemic species and can drastically change labor market prospects for local populations. All of these consequences may lead to large private gains and losses as well as global externalities and have drawn the attention of scholars and policy makers. More recently, the Paris Agreement stemming from the XXI Conference of the Parties placed protection of tropical forests as a key component for curbing climate change. Among the main causes of tropical deforestation, several commentators have identified logging of high-value timber species as an important precursor of large scale deforestation. A number of countries have accepted this argument and appealed to strict policies such as logging bans to protect specific species and forests. One example of such policy is the Brazilian mahogany market prohibition. We find evidence that the shutting down of this market combined with poor enforcement has led to an even larger volume of illegal mahogany harvesting. We use this result and differences-in-differences estimation to test whether municipalities where mahogany naturally occurs have experienced increased deforestation after prohibition. Our paper contains two main contributions: (i) evaluation of the impact of a timber market prohibition policy on deforestation, and (ii) the testing of the hypothesis that harvesting of high-value timber indirectly leads to large-scale deforestation. To our best knowledge, no study has attempted to directly estimate this hypothesis, despite its prevalence in the tropical deforestation literature and its use to at least partly justify forest protection policies such as logging bans. Our results suggest that the mahogany prohibition policy in Brazil meant to protect the species and the Amazon forest has instead led to increased deforestation in affected areas.

This chapter discusses critical issues surrounding the economics of the environment in Brazil. A general framework for analyzing the state of the environment in a developing country is first presented and is used as a departure point for the study of the recent Brazilian case. High marginal utility of consumption, high marginal cost of abatement, imperfect representation of citizens by politicians, and market failures are put forth as candidate explanations for poor environmental quality and low willingness to pay for environmental improvements in developing countries, even when large gains to health and income could result. These arguments are applicable in several contexts in Brazil, but not universally. The chapter presents a critical and selective literature review on key topics including deforestation in the Amazon region, aspects of ethanol production and consumption, and climate change.

Agents operating in illegal markets cannot resort to the justice system to guarantee property rights, to enforce contracts, or to seek protection from competitors' improper behaviors. In these contexts, violence is used to enforce previous agreements and to fight for market share. This relationship plays a major role in the debate on the pernicious effects of the illegality of drug trade. This paper explores a singular episode of transition of a market from legal to illegal to provide a first piece of evidence on the causal effect of illegality on systemic violence. Brazil has historically been the main world producer of big leaf mahogany (a tropical wood). Starting in the 1990s, policies restricting extraction and trade of mahogany, culminating with prohibition, were implemented. First, we present evidence that large scale mahogany trade persisted after prohibition, through misclassification of mahogany exports as "other tropical timber species." Second, we document relative increases in violence after prohibition in areas with: (i) higher share of mahogany exports before prohibition; (ii) higher suspected illegal mahogany activity after prohibition; and (iii) natural occurrence of mahogany. We believe this is one of the first documented experiences of increase in violence following the transition of a market from legal to illegal.

Since the beginning of industrialization it is possible to observe an increase in the levels of greenhouse gas (GHG) emissions caused by human activities. Given this issues, the problem of GHG and related climate change are relevant points today. Discussions began to gain the attention of the world with the Kyoto Protocol and they are in vogue due to the fact that the growth of GHG remained, even with emergence and advancement of climate policies. Moreover, they are in vogue due the sudden globalization of world economies and the expansion of international trade. Thus, this paper seeks to make an empirical investigation of the responsibility for CO2 emissions and international trade for the 27 countries of the European Union and 13 other selected countries for the period of 1995-2009. This paper also permeates issues and discussions about the environmental theories and hypotheses involving international trade. The input-output matrices were used for 40 countries plus the “rest of world” for the period of 1995-2009, that comes from of the WIOD project. In terms of results, we have evidence that the decrease of CO2 emissions in some countries comes from high interaction in terms of trade with other countries.

This paper investigates the mechanics of international trade and CO2 emissions in two blocs of countries (“North” and “South”) by analyzing data from the World Input-Output Database. We use and adapt the Miyazawa technique to estimate the linkages between international trade and the environment at a global scale, a contribution that to our best knowledge has not yet appeared in the literature. Our results suggest that both the North and the South have become less pollution intensive (technique effect) over the years. Interestingly and in contrast to much of the literature, we also find support to the hypothesis that the South has specialized in relatively more pollution intensive activities (composition effect).

A number of technological, institutional and market developments have lowered the minimally economic viable wind speeds for wind power generation while contributing to increasing profitability of the wind power industry in recent decades. Yet, information on the potential for wind power generation is still highly uncertain in many regions of the globe, particularly those with complex terrain features. We focus on an area by the foothills of the Appalachian region. Because we do not have precise wind measurements for this area, we do not attempt to produce an actual wind map, but instead use a three-dimensional computational fluid dynamics model to demonstrate the calculation of high resolution wind speeds with complex terrain information. Using this approach, we show how finer wind speed information can impact the status of an overlooked region in terms of its wind potential and improve wind prospecting by enabling investors to focus on the most promising sub-regions of a study area. Since private sector investors might not have the incentive to invest in finer-scale wind resource assessment that can be easily observed by competitors, public sector incentives or direct investments can help to promote wind power generation in overlooked but viable regions.

Since the beginning of industrialization it is possible to observe an increase in the levels of greenhouse gas (GHG) emissions caused by human activities (WTO, 2009). Given this issues, the problem of greenhouse gas (GHG) and related climate change are relevant points today. Discussions began to gain the attention of the world with the Kyoto Protocol and they are in vogue due to the fact that the growth of GHG remained, even with emergence and advancement of climate policies. Moreover, they are in vogue due the sudden globalization of world economies and the expansion of international trade. Thus, this paper seeks to make an empirical investigation of the responsibility for CO2 emissions and international trade for the 27 countries of the European Union and 13 other selected countries for the period of 1995-2009. This paper also permeates issues and discussions about the environmental theories and hypotheses involving international trade. The inputoutput matrices were used for 40 countries plus the “rest of world” for the period of 19952009, through the database of the WIOD project. The following results can be highlighted: i) the increase of CO2 emissions in developing countries (e.g. Brazil , Russia, India and China) ; ii) the opposing behavior of the USA and BRIC ( Brazil , Russia, India and China), with the exception of India, in terms of net balances of emissions embodied in international trade; iii) evidence that the decrease of CO2 emissions in some countries comes from greater interaction in terms of trade with other countries; iv) the developed countries have an internal production process increasingly less polluting, and contrary to, developing countries have an internal production process more polluting, given the pairing between them. Furthermore, this study, through the different results, makes a discussion on the theory of environmental Kuznets curve, the pollution haven effect, the pollution haven hypothesis, trade’s patterns between North and South, and others.

Some scholars suggest that global timber markets, especially those involving high value species, are a leading cause of tropical deforestation. Despite limited empirical evidence, this hypothesis rests on the assumption that global timber markets respond to a common equilibrating mechanism that provides strong enough incentives for loggers in the tropical regions of the world. This article develops a simple model and taps into a unique data set on timber prices of hardwood and softwood in leading markets to test the global timber markets hypothesis. While we find evidence of a global equilibrating mechanism with potentially significant economic incentives to affect tropical deforestation, our results do not endorse the common conjecture in the literature that timber price shocks in developed countries lead to a homogeneous response in terms of deforestation everywhere in the tropical world. Instead, they invite further development of structural global timber market models to assess the linkages between markets and the consequences of such linkages to deforestation.

We use a novel and more precise data set on greenhouse gas (GHG) concentrations in the Amazon region to estimate the nexus between local economic indicators and GHGs. We find that urbanization and waste generation emerge as new and important drivers of observed methane emissions. Local nitrous oxides emissions seem to result mainly from agricultural production, and carbon dioxide seems to be driven by deforestation. Given the importance of the Amazon region to global climate, these findings can offer insight into the development of scientific models for the natural environment and the design of effective environmental policies for the region.

We use a unique data set to investigate the economic consequences of banning the harvest and trade of Brazilian mahogany. Because we find strong evidence that mahogany is smuggled out of Brazil as "other tropical species'' through formal export mechanisms, we are able to construct a time series of quantities and implicit export prices covering both the periods before and after prohibition. Our finding suggests that a trade ban increases supply and makes the illegal good more affordable. Our analysis can offer important insights into other illegal markets, such as those for narcotics and products manufactured from endangered animal species. (JEL Q21, Q56)

Recent measures to restructure the electric power sector in different US states have raised the interest of policy makers, commentators, and the general public as to the actual impact of restructuring on both the economy and the environment. This paper focuses on two aspects of restructuring, namely its potential impact on the efficiency of electricity generation and air pollution. Our empirical results suggest that restructuring contributes to improved efficiency of electricity generation and better air quality through reduced electricity-induced sulfur dioxide (SO2) and carbon dioxide (CO2) emissions, although no effect was found for emissions of nitrous oxides (NOx). These results, in turn could have important implications for policy in this area.

ABSTRACT This paper offers a theory of the environmental Kuznets curve (EKC) based on the scarcity of capital relative to environmental quality. In a unified treatment of both market and transition economies of the former Soviet Bloc, we characterize a dynamic economy subject to two sources of market failure: a pollution externality and a pure public good ‘environmental quality’. We derive a policy rule to implement the social optimum in market and transition economies and show how, in general, a pollution tax or tradable permits can only implement the social optimum if accompanied by other taxes on consumption or profits.

ABSTRACT A number of studies show that climatic shocks have significant economic impacts in several regions of the world, especially in, but not limited to, developing economies. In this paper we focus on a drought-related indicator of well-being and emergency spending in the Brazilian semi-arid zone – rainfed corn market – and estimate aggregate behavioral and forecast models for this market conditional on local climate determinants. We find encouraging evidence that our approach can help policy makers buy time to help them prepare for drought mitigating actions. The analysis is applicable to economies elsewhere in the world and climatic impacts other than those caused by droughts.

Time-series evidence on growth and the environment suggests an environmental Kuznets curve (EKC), whereas longitudinal studies fail to produce robust estimates for the EKC. This paper offers a theoretical explanation for these apparently contradicting findings, and theoretical guidance for future empirical work.

We take small steps towards the approximation between economic analysis and the science of climate forecasting in the formulation of policies to alleviate the impact of climatic shocks. We do so by estimating the relationship between climate variables and corn production in Ceara, an important State in the Brazilian semi-arid. Using parametric and non-parametric regression models, we first estimate the relationship between contemporaneous sea surface temperatures (SSTs) for the Pacific and Atlantic oceans and the local rainfed corn market. Next, we investigate the forecasting potential of future corn production conditional on information on current SSTs. We find strong evidence that climate determinants are important in determining current and future corn production, a key indicator of the climatic stress to which a large number of small farmers are subject in the Brazilian semi-arid. Additionally, corn production in the region is negatively correlated with federal government transfers meant to mitigate the impact of local droughts. These resources have been subject to lethargic bureaucracies, corruption and economic inefficiencies in general. The observation and forecasting of corn production can be invaluable in the design of more efficient, expeditious and transparent policies to mitigate the effects of droughts in the region.