ECON371/UBCO2024WT1/NewsWiki/group2/Week 1

Rainforest Degradation Timelapse 1984-2018

URL

https://thinklandscape.globallandscapesforum.org/67561/whats-happening-with-deforestation-in-the-amazon/#:~:text=But%20there's%20good%20news%3A%20after,major%20declines%20in%20forest%20loss

Problem

The article describes the significant damage to the environment caused by deforestation with a focus on the Amazon rainforest. As the forest is open access between nine countries, the preservation of the rainforest is considered an open access issue.

Summary

Deforestation has been an ongoing problem for several years in the Amazon rainforest, with it being at an all time high in 2021 and 2022 . However, in recent years, deforestation in the Amazon has decreased by 40-50%, particularly in Brazil, Colombia, Peru, and Bolivia, reversing past trends. The news article highlights ongoing challenges that result from deforestation and credits the policies that have led to this drastic improvement. Brazil's 50% reduction is attributed to President Lula's policies focusing on stricter law enforcement, environmental funding, and protection of Indigenous rights. Colombia has seen a 70% reduction due to pro-conservation government actions. However, challenges persist, including rising deforestation in Brazil’s Cerrado region, potential droughts and fires due to El Niño, and political instability in Peru, which could undermine these gains. Ongoing efforts are crucial to sustaining these improvements.

Economic Concepts

Externalities: An externality is where someone has to bear the cost of an action, despite not being directly involved in the action. It is termed “external” due to the fact that it affects someone who is neither a producer or consumer of the externality. There can be both positive and negative externalities where an individual is affected based on each situation respectively. For example, a positive externality is where someone plants a garden of flowers in front of their house, it provides a positive externality for everyone walking by it.

Open Access: The open access problem is where people will tend to overuse a resource that is available to everyone, as long as it benefits them more than it costs them. This usually takes place when there is limited communication between different users of the resource. So if multiple farmers use a field for sheep grazing, as long as one of the farmers receives more benefits from the sheep by letting them graze, they will keep adding sheep until the sheep can no longer benefit from the grazing on the field.

Application

Externalities in the article: As the Amazon rainforest is a critical part of our environment, its destruction is an externality for most places as it could release large amounts of emissions into our atmosphere. The extreme droughts being caused by deforestation are also leading to several communities experiencing hardships such as loss of power, fewer crops, and water shortages. Deforestation is especially hitting indigenous groups that rely on the rainforest for its natural benefits rather than the lumber. The countries sharing the rainforest with Brazil will suffer more from Brazil’s deforestation efforts as it controls 60% of the area. The droughts caused by deforestation have also led to increased wildfires, especially in 2024. Which leads to mass amounts of smoke being released into the air harming any communities and animals caught in the ash.

Prof: To identify where the externality is, need to identify who the people are involved in the decision/transaction and who the third parties are. In this case, third parties would be the Indigenous peoples who are suffering from the loss of their traditional ways of life, and people inside and outside the Amazon who will be adversely affected by the changes in precipitation and other weather phenomenon should the Amazon 'collapse'.

The open access problem occurs when there are multiple parties using the same resources for their own private benefit, as long as the costs to them are lower. In the article, we can see that there are multiple parties trying to use the resources available in the Amazon Rainforest. Illegal ranchers, illegal loggers, miners, criminals, Indigenous Peoples, municipalities and many more groups are all trying to grab land in the Amazon Rainforest for their own personal gain. Additionally, this article talks about the Brazilian Cerrado experiencing a 45% increase in deforestation, which continues to affect agricultural expansion. Luckily, to help curb the problem of open access, some laws have been passed to protect Indigenous lands, there are also funds in place to approve fewer projects and ensure sustainable usage of the land. However, in Peru, there are laws decriminalizing illegal logging for agriculture and livestock purposes, which will increase the open access problem.

Prof: Yes, the Amazon, within the countries involved, seems to have some open access types of issues. There is no effective way (at least not yet implemented) to keep ranchers, loggers, miners, etc. from extracting resources from the forest, while those resources themselves are 'rival', in that once one person takes it, it is not available to anyone else.

Conclusion

The above news piece emphasizes how significant policy changes and political action can be in halting deforestation. The deforestation of the Amazon continues to be a major environmental and economic concern, despite recent dramatic reductions. The global ecosystems still stand at risk due to externalities caused by deforestation, which include climate change, droughts, and wildfire hazards. Management of the forest sustainably is hampered by the open access issue. Reforms in policy have been made in some countries, such as Brazil and Colombia, but more work is needed to guarantee the long-term survival of this important ecosystem.