Collective property rights reduce deforestation in the Brazilian Amazon

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PNAS – Proceedings of the National Academy of Sciences of the United States of America

Collective property rights reduce deforestation in the Brazilian Amazon
Kathryn Baragwanath and Ella Bayi
PNAS first published August 11, 2020.
Deforestation in the Amazon has reached record highs in 2019 and poses a serious threat to climate change. In Brazil, about 2 million hectares of indigenous land are still awaiting homologation, and thus do not have their full property rights. We find that granting property rights significantly reduces the levels of deforestation inside indigenous territories, and the results are of significant orders of magnitude. Our local effects indicate that areas of land right inside a territory with full property rights experience significantly less deforestation than those right outside of the border. Collective property rights might thus provide an effective way to reduce deforestation in the Brazilian Amazon.
In this paper, we draw on common-pool resource theory to argue that indigenous territories, when granted full property rights, will be effective at curbing deforestation. Using satellite data, we test the effect of property rights on deforestation between 1982 and 2016. In order to identify causal effects, we combine a regression discontinuity design with the orthogonal timing of homologation. We find that observations inside territories with full property rights show a significant decrease in deforestation, while the effect does not exist in territories without full property rights. While these are local average treatment effects, our results suggest that not only do indigenous territories serve a human-rights role, but they are a cost-effective way for governments to preserve their forested areas. First, obtaining full property rights is crucial to recognize indigenous peoples’ original right to land and protect their territories from illegal deforestation. Second, when implemented, indigenous property rights reduce deforestation inside indigenous territories in the Amazon rainforest, and could provide an important positive externality for Brazil and the rest of the world in terms of climate change mitigation.