Amazon: Urban productivity can curb deforestation – 09/05/2023 – Environment

In addition to agricultural productivity —a known ally in the fight against deforestation, as it inhibits land expansion—, the World Bank proposes urban productivity in the Amazon as a strategy to slow down deforestation, promoting, at the same time, regional and national development .

“Investing in urban infrastructure to reduce disparities in the standard of living in economic and service centers, increasing the competitiveness of cities as regional economic centers”, recommends the economic memorandum “Equilíbrio Delicate Para a Amazônia Legal Brasileira”, published this Tuesday (9) by the World Bank.

“A greater emphasis on productivity, particularly in other sectors (not linked to commodity production), would boost development across the country and help strengthen Amazonian economies, while reducing pressure on natural forests” , says Johannes Zutt, director of the World Bank for Brazil.

The study identified 20 potential economic hubs in the Legal Amazon, defined based on criteria such as population, distance and the attractiveness of at least five other cities.

In addition to the nine state capitals of the Legal Amazon, the economic centers include the capital of Piauí, Teresina (which is close to the border with Tocantins) and ten other cities of greater economic size in the region.

“Belém, Imperatriz, Palmas, São Luís and Teresina seem to have the best spatial resources, as they are in municipalities much closer to the markets and have higher population densities”, describes the study.

“Boa Vista, Macapá, Manaus and Rio Branco have a relatively dense population density, but are part of peripheral municipalities; therefore, they require different policies”, emphasizes the study.

The research also observes that “the proposed economic centers seem to have a greater participation of recent university graduates, which is also one of the key factors for the growth of urban productivity in the Legal Amazon”.

According to the study, the economic poles would be essential to foster the growth of urban productivity in the region, as well as other poles, aimed at providing services.

Although they concentrate three quarters of the regional population, the Amazonian cities are dense and occupy only 0.03% of the Legal Amazon. Urban development is not intrinsically linked to deforestation, whose growth in the urban perimeters of the Amazon is linked to value chains, mainly agricultural, and to the logistical infrastructure, in which the impact of connecting roads with the rest of the country stands out.

“Achieving productivity gains in regions with low space resources and high emigration is likely to be costly as it goes against market forces. It is likely that such public investments in space resources will not be sufficient to drive large private investments into the region; therefore, it is possible that the benefits have a local reach and short duration”, emphasizes the study.

For large public investments to generate returns, the World Bank recommends that they accompany interventions in structural bottlenecks of local development, such as land regulation and improved access to quality services.

The study points out that, although there is a long history of projects for the integration of the Legal Amazon, there is still a lack of a defined agenda on Amazonian cities, which may be, according to the study, the main economic actors and service providers in the Amazon.

In addition to adding contributions on the role of the urban economy, the study also makes recommendations on financing for the conservation and sustainable development of the Amazon.

The study defends reforms in rural credit —which should concentrate subsidies for small producers, conditioning the benefit to low-carbon agricultural practices— and also in the ITR (Rural Territorial Tax).

According to the World Bank, the ITR generates perverse incentives for deforestation and should be linked to productivity, the CAR (Rural Environmental Registry) and an independent assessment, replacing the self-declaration currently made by the rural owner.

The study also recommends care in drawing up trade agreements and cites as an example the negotiation between the European Union and Mercosur, fought precisely because of environmental concerns.

“They can directly harm Amazonian states that depend on tax exemptions, especially Amazonas, further highlighting the need for less dependence on tax incentives”, warns the World Bank, which also reinforces concerns about the risk of incentives to deforestation linked to export commodities.

“Trade agreements that include agricultural liberalization will continue to pose a risk to the conservation of Amazonian forests until economic and institutional maturity is sufficiently advanced,” the memorandum states.

_{The Planeta em Transe project is supported by the Open Society Foundations.}