Calculating the Tradeoffs Between Protecting or Cutting Down the Rainforest


While neither Alexander Daniels ’14 nor Daniel Schmoll ’13 traveled to the Amazon River basin to do research this summer, they were still able to do an extensive economic analysis of the land from a comfortable distance, in the far less humid and bug-infested computer lab of Adams Hall.

The two were research assistants for Erik Nelson, assistant professor of economics, whose research focuses on the economic ramifications of land-use changes. Together, the three created a series of maps of the 6.7-million-square-kilometer basin, which lies mostly in Brazil, to compare the economic tradeoffs between cutting down protected parts of the rainforest or expanding these areas.

Assistant Professor of Economics Erik Nelson

Since the early 1990s, the Brazilian government has established a series of Amazon Region Protected Areas, or ARPAs, and is in the process of considering whether to expand them. “The government is interested in knowing if this is a wise use of the land. As Brazil grows in population and economically, there could be tradeoffs for setting aside land for conservation,” Nelson said. “The tradeoff is if you clear the land of trees, you can’t allow big herds of cows, you can’t create cities, roads, or have other land uses that are valuable to us.”

There are 61 current ARPAs, for a total of about 286,000 square kilometers. The government is proposing to increase the protected region to approximately 470,000 square kilometers.

The maps Daniels and Schmoll created were more hypothetical models than your standard green-and-blue maps. Using ArcGIS software, they modeled what the Amazon basin would look like in 2050 under two different scenarios. They assumed in one scenario that the new ARPAs were put in place and the government was active in the conservation of the forest. The other scenario assumed the new ARPAs weren’t established and the government did not protect the current ARPAs from being cut down for cropland, pastures or timber harvesting.

Then the team looked at two variables that could be affected by these scenarios: hydroelectric power and carbon emissions. Brazil wants to ramp up its hydro-power potential and build many more dams in the Amazon. But if you remove parts of the forest, you can change precipitation patterns, Nelson explained. On the other hand, when rain falls in a forest, some of it is claimed by plants, or used by humans, reducing the amount available for a hydroelectric dam.

Alex Daniels ’14

According to their preliminary conclusions, Nelson said that if the current ARPAs were left intact and new ones added, these areas would contribute roughly 15% more water to hydroelectric facilities. (Although they also found that the ARPAs contribute only a tiny slice of water to the watershed of hydro-power facilities, about 1.6%, which would increase to 6% in 2050 if the ARPAs were expanded.)

Schmoll also looked at how much carbon would be sequestered in one hectare of forest, calculating the costs of keeping the forest intact versus cutting it down and releasing carbon into the atmosphere. “Economists have said there is some benefit from keeping carbon in wood rather than the environment,” Nelson explained, namely to prevent volatile, and costly, weather events. “So you can see the Brazilian government would be interested in knowing what the tradeoffs were.”

Nelson said their preliminary estimates show that the basin, in the scenario of greater land conservation, would sequester 5.2 billion to 7.1 billion more metric tons of biomass carbon. “If we assume that every ton of carbon not released into the atmosphere generates $30 in cost savings, this creates a value of approximately $180 billion,” Nelson explained. “The idea would be that by sequestering carbon in the Amazon, and thereby slowing the rate of climate change around the world, the Brazilians are creating a public good that benefits many people around the world. … Given [this] we should be willing to pay something for Brazil to provide this good.”

To undertake this project, Nelson received a grant from the World Wildlife Fund. “The documents we will create will be sent to the Brazilian WWF office, and they’ll interact with the Brazilian government,” he said.

Daniel Schmoll ’13

So, far away from the rainforests of South America, Daniels and Schmoll sat before computers every day with Nelson, feeding soil-quality and rainfall data into the GIS program. “Every day, we plugged away,” Daniels said. “GIS is a time-consuming, finicky program. There was a lot of fixing bugs.”

Schmoll said he gained an appreciation of the amount of work required for a major research project. “We all worked together to try and come up with the best way to approach the different questions we encountered,” he said. “I think having three heads there as opposed to just Prof. Nelson really sped up the process and we were able to accomplish a lot in the short period Alex and I were employed.”

Both Daniels and Schmoll are economics majors; Schmoll is also majoring in history.

Daniels said he’s had many opportunities at Bowdoin to merge his interest in economics with environmental issues. “People look at economics as though it is not serving the community, but by working on a project like this, you feel like you’re doing some sort of good,” he said.

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