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How Do Climate Adaptation Policies Affect Deforestation? Evidence from a Large-Scale Water Policy

This paper examines the effects of a climate adaptation policy on production and environmental outcomes in the context of Brazil’s semiarid region, the country’s poorest and most drought prone region. The large-scale, low-cost water policy builds rainwater reservoirs designed to boost production and strengthen rural producers’ resilience. Using a difference-in-differences approach and linking property-level administrative data to high resolution satellite data, we find that cistern construction real locates land toward higher-productivity uses. Results indicate an increase in cropland area by 7.6% and higher-quality pasture area by 14.5%, while lower-quality pasture area decreases by 3.2%. Forest cover increases by 1.1%, consistent with a land saving effect driven by a reduction of lower-quality pasture. Effects hold across property sizes and are slightly larger in magnitude for small-sized properties. Our cost-benefit analysis reveals a positive aggregate return with each invested monetary unit generating 1.76 units of benefits, indicating that adaptation policies can also advance mitigation goals via forest preservation.

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Ambiente | Cambio climático | Recursos naturales | Agua y saneamiento | Agricultura

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Brasil

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https://scioteca.caf.com/handle/123456789/2557

Date

2025-12-12

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6.1 Documentos de trabajo en investigación socioeconómica

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Except where otherwised noted, this item's license is described as CC-BY-NC-ND
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How Do Climate Adaptation Policies Affect Deforestation.pdf (8.8 MB)

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