Carlos José Caetano Bacha
This chapter analyzes the evolution of agriculture in Brazil from the early sixteenth century until the second decade of the twenty-first century. It focuses on seven domestic and external conditioning factors that have stimulated and supported the sector’s expansion in Brazil. These factors and the way that they have impacted agricultural expansion and will continue to drive Brazil’s agricultural sector for at least the next two decades. Given the availability of fallow arable land, at current productivity levels, this idle area could be used to double crop production. The transference of road operation to the regulated private sector will lead to improved road surfaces and maintenance, thereby facilitating the transportation of agricultural production to exporting ports. The reduction of agricultural sector subsidies and the increased forest conservation efforts by the European Union should improve Brazilian agriculture’s competitive position in many foreign markets currently served by EU farmers. The increasing share of Brazil’s agricultural production sold in world markets makes the country’s agricultural sector more vulnerable than ever to uncontrollable outside forces. World economic growth, especially that of China and the European countries, is a necessity if the Brazilian agricultural sector is to continue expanding and improving efficiencies. Most Brazilian agricultural inputs continue to be produced by foreign companies or their Brazilian subsidiaries. These overseas entities are a very strong force in the domestic inputs market and represent another uncontrollable factor that affects local farmers’ earnings and Brazil’s balance of trade.
Edwin S. Mills
This chapter examines the functions of and prospects for large metropolitan areas (MAs) in the United States. It argues that the high cost of transporting people and goods is a necessary, but not sufficient condition for MAs. Economies of scale and scope and the technical ability to substitute structures for land provide cost advantages to firms located in MAs. The factors that limit the sizes of the largest MAs include the size and geography of the country, the limited demand for commodities and services produced in the MA, congestion and pollution, and social issues such as crime, homelessness, poverty, illegitimacy, racial tensions, and other forms of alienation that increase with MA size. Because of these limiting factors, the largest US MAs are expected to grow at slower rates than the US population in coming decades, whereas suburbs will continue to experience rapid growth.
Geraldo B. Martha Jr. and Eliseu Alves
Brazilian agriculture reinvented itself by targeting a science-based approach. Embrapa, the research arm of the Brazilian Ministry of Agriculture, is recognized as key in this process. A set of characteristics—public corporation model; scale of operation at national level; spatial decentralization; specialized research units; strong focus in human capital; a vision of an agriculture based on science and technology—explains Embrapa’s strength and achievements. Looking ahead, agricultural production needs to increase at least at the same pace of demand. Otherwise, prices will increase, and the poor will suffer the greatest impact. One of the greatest barriers to ensure modern technology will be more broadly and effectively adopted is market imperfection, which alters relative prices and the returns to investment in technologies. Reducing market imperfections is a necessary condition for expanding production in a more inclusive way, and to increase the effectiveness of policies targeting technology adoption by farmers.
This chapter analyzes the evolution of the energy sector in Brazil, charting shifts in the energy matrix, in particular the rise in renewables and increasing self-sufficiency in fossil fuels. Production of energy in Brazil, particularly electricity, includes a high percentage of renewable sources. Electricity is generated mostly by hydroelectric plants, cars are fueled with ethanol produced from sugarcane, biofuels have good prospects for success, and wind generation of electricity is picking up slowly. The country has managed to become almost self-sufficient in oil production. However, most of the production of energy is in the hands of government institutions, imposing a degree of instability on the system. This chapter has reviewed the effects of some important policies introduced at different points in time. Looking ahead, the chapter concludes that energy policy in Brazil is now moving in the right direction, although significant challenges remain.
Ariaster B. Chimeli
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.
Claire A. Montgomery
As long as people and fire have coexisted on this planet, fire has been both purposefully used as an agent and subsequently experienced as a consequence of land use change. This article begins with a history how people have used fire as an agent of land use change over many millennia, how attitudes toward fires have evolved over time, how fire policy has developed in the United States over the last century, and what challenges for fire policy are emerging now. Three core themes appear in the literature on the economics of wildfire: spatial externalities, incentives, and risk-based decision analysis. These themes are discussed in the context of how wildfire economics may best contribute to the design of efficient and effective fire policy for the future.
Mark D. Partridge and Dan S. Rickman
Two largely separate literatures exist on regional economic development and land use economics. This article argues that a full understanding of each of the two areas requires greater knowledge of their interrelationship. It reviews key studies of the two literatures, particularly those related to the close interconnectedness of regional economic development and land use. It contends that a critical shortcoming in the literatures is that key features that affect both land use and economic activity are typically not systematically considered. It then posits that the spatial equilibrium framework is especially suited for understanding the various feedback mechanisms that affect both. Also particularly promising are the increased availability of geographical information system data and microdata, as well as recent methodological advances in empirical estimation and modeling.
Edward Stone and JunJie Wu
This chapter investigates the relationships between municipal profiles and household location choice, a primary driver of land use change. Urban economics models typically attribute historical location patterns to rising incomes, falling commuting costs, and cheap new housing on the periphery. Local public finance models endogenize taxes and public services and emphasize preferences for alternative tax service bundles. Following a review of the related theory and literature, a case study from the Portland, Oregon, metropolitan area demonstrates how researchers might model the relationships between household location choice and municipal profile using spatially explicit data. This case study discusses data and estimation strategies, including reduced-form models, instrumental variable estimators, and treatment effect estimators. The fundamental challenge is identification in the presence of endogeneity.
Madhu Khanna, David Zilberman, and Christine L. Crago
The introduction of biofuels to agriculture has led to a new reality by linking agricultural and livestock sectors with energy markets. This article reviews the underlying assumptions and major findings of models being used to measure the land use impact of biofuels to develop an understanding of the drivers of land use change with biofuels. These studies show that biofuels have the potential to meet a significant percentage of liquid fuel demand and demand for renewable electricity in the future and that current targets being set in the United States and the European Union for renewable fuels are feasible with moderate increases in crop prices. Models differ in their assessment of the magnitude and location of global land use change due to biofuels but show that some trade-offs between food and fuel production are inevitable. High yielding feedstocks and growth in productivity of food crops can mitigate the adverse impacts of biofuels.
Joel B. Eisen
This chapter discusses “stigmatized sites” located in urban areas in the United States and Europe and “brownfields” redevelopment programs aimed at removing the stigma and promoting sites’ remediation and reuse. The stigma originated as an unintended effect of environmental laws promoting hazardous waste site cleanups. Brownfield sites presented unknown levels of contamination, and attempting to evaluate them might lead to liability under these environmental laws. To lessen the stigma, the United States and other nations created national and state voluntary cleanup programs and other legal and financial incentives for site analysis, remediation, and redevelopment. This chapter examines these programs and incentives and concludes that they may be improved with continued oversight after remediation activities are complete, attention to redevelopment that meets smart growth and climate change goals, integration of effective public participation, and creation of metrics for evaluating sites to assess lifecycle impacts of remediation and reuse.
Charles C. Mueller
This chapter examines the progression of Brazil’s agriculture since the end of World War II, a period during which a highly concentrated pattern of land distribution remained basically unchanged, despite remarkable changes in agriculture. Three different phases are recognized: a phase of horizontal expansion, up to the early 1970s, in which agriculture remained essentially traditional; a period of substantial but conservative modernization of agriculture, from the early 1970s to the late 1990s; and a phase of consolidation of modernization. It highlights the development of two key elements: a modern segment, usually composed of large farm units; and “traditional agriculture,” constituted mainly of small farms. The chapter discusses their contributions to growing commodity exports and to the supply of food for domestic markets. The chapter concludes by examining events—affecting both the large-scale agriculture and small farm units—that led to the maintenance of the concentrated pattern of land tenure.