TED Case Studies
Brazil Deforestation and Logging
1. The Issue
Although the primary cause for deforestation in the Amazon
Basin lies in domestic forces -- agricultural production, cattle
ranching, commercial logging and local demand for fuelwood -- trade
does play an important marginal role both in destroying the rain
forests and possibly saving them. Exports of non-raw wood products
are permitted in Brazil and is a widely traded commodity.
International demand for forestry products also plays a large role
in the process of deforestation. Beginning in 1990, Brazil has
tried to eliminate all non-tariff barriers and reduction of tariffs
on exports of wood and wood products. On the other hand, other
tradeable products taken from the rain forest, such as nuts, can
provide important economic benefits to indigenous peoples and
encourage the saving of trees.
The main sources of deforestation in the Amazon Basin are
agricultural production, cattle ranching, commercial logging and
demand for fuelwood. Amazon logging and wood processing
operations have been able to benefit from government incentives and
outright subsidies (see CHILE and USWOOD cases). SUDAM
(Superintendency for Development of Amazonia) was established to
help subsidize industrial and agricultural development in many
sectors, including the wood forestry industries. Subsidies coupled
with tax breaks allowed Brazilian firms to reduce their income tax
payments by one half if the savings were directed to industrial
investments in the Amazon Basin. However, many of these
incentives have been eliminated over the past two years. Since
1969 Brazil has maintained a raw log export ban for unprocessed
tropical wood; therefore the exports have been dominated by
processed products (see INDONES case). However, it is often the
case were that the actual processing of wood is minimal; done
merely to meet the export requirements.
The five million square kilometers of Amazon tree cover make
up the largest continuous expanse of tropical rain forest remaining
in the world. Although such forests cover only 7 percent of the
planet's land surface, they are inhabited by some 50 percent of the
plants and animals found on the globe (estimates of which range
from a total of two million to 30 million species). Most
disturbing of all is the fact that the total is unknown. As many
as 27,000 species may be consigned to extinction every year,
calculates Harvard University biologist Edward O. Wilson.
The impact of these extinctions is multifold: the rain forests
have profound philosophical, spiritual, cultural, scientific and
economic significance. Because Brazil is considered to have the
highest species diversity on the earth, it is the epicenter of
efforts to stem deforestation.
One alternative to harvesting wood is harvesting products of
the tropical rain forest. The principal harvest product in Brazil
is nuts. A well-known product derived from Brazil nuts is a candy
bar called "Rainforest Crunch." The candy was originally sold with
the following claim on its packet: "The nuts used in Rainforest
Crunch are purchased directly, with the aid of Cultural Survival,
from forest peoples." Stephen Corry, however, states that this
claim is not true, because "for two years or so, all of them
[nuts] were bought on the normal commercial market." In 1989, the
nut industry had a turnover of $20 million. Additionally, harvest
advocates argue that the labels on their goods are an important
educational tool. They say that they "use product packages to
educate consumers about both rain forest and the peoples who live
in them. In 1991, some 30 million Americans bought products that
explained the importance of the rain forests, how consumers could
help local groups protect their resources..."
3. Related Cases
4. Draft Author: Ruth Ferszt and Sabrina Franzheim
5. Discourse and Status: DISagreement and INPROGress
6. Forum and Scope:BRAZIL and UNIlateral
7. Decision Breadth: 1 (Brazil)
8. Legal Standing: LAW
The case revolves around Brazilian domestic law on forest
9. Geographic Locations
a. Geographic Domain: South America [SAMER]
b. Geographic Site: AMAZON
c. Geographic Impact: BRAZIL
10. Sub-National Factors: YES
The Amazon includes the northern region of Brazil and
constitutes 39 percent of the countries' territory. The states in
Brazil include Acre, Ampa, Amazonas, Para, Rondonia, Mato Grosso,
Tocantins and Maranhao.
11. Type of Habitat: TROPical
The Amazon is the largest tropical forest in the world.
12. Type of Measure: Export Ban [EXBAN]
13. Direct v. Indirect Impacts: DIRect
14. Relation of Trade Measure to Environmental Impact
a. Directly Related to Product: YES WOOD
b. Indirectly Related to Product: YES NUTS
c. Not Related to Product: NO
d. Related to Process: YES DEFORestation
15. Trade Product Identification: NUTS
The product is tropical logs that are banned for export and
must be processed before being exported. The leading exporters of
raw wood are Malaysia, Indonesia, Singapore (usually trans-
shipments), Philippines, Ivory Coast, Brazil, and Gabon (see MALAY,
THAILOG, and AFRICA cases). The leading importers are Japan,
China, Hong Kong, the United States, Singapore (usually trans-
shipments), South Korea, and the United Kingdom.
16. Economic Data
Brazil's lumber exports are currently under 5 percent of the
world total but the potential in the Amazon has been valued at $600
billion. The United States and Europe are the largest importers
not only of wood, but also nut and latex products from Brazil.
The theory behind the rain forest harvest is that forests are
of more value when left standing than when they are felled. This
value can be expressed in the monetary price of products which can
be extracted from forests, mainly fruits, nuts, and cosmetic oils.
Marketing of forest harvest products by indigenous groups
often involves outside intermediaries; for example, practically all
Roman Catholic missions in rainforest areas encourage indigenous
people to market their products. According to Stephen Corry,
however, only a few of these intermediaries act honestly and
The harvest involves producing for a foreign buyer who
controls the project and will often use the raw material (rubber
vines, hornbill ivory, bear paws, bezoar stones, gaharu incense,
birds' nests, pulp, paper, lumber products, etc.) as input products
in final demand goods such as candy bars, hair conditioner or even
dog food (which is now marketed in the United States under a rain
forest label). Moreover, such small scale regional markets may
provide some cash for indigenous peoples, but it does not solve
their most pressing problem: the invasion and expropriation of
17. Impact of Trade Restriction:BAN
18. Industry Sector:WOOD and NUTS
19. Exporters and Importers: BRAZIL and MANY
Brazil bans the export of raw logs which means that some type
of wood processing must take place in Brazil prior to export. The
sawdust from processing tropical hardwoods is collected and
exported to Scandinavia for use in the pulp and paper industry,
displacing the need for native Scandinavian pines.
20. Environmental Problem Type:DEFORestation
Deforestation is the major problem at hand but other problems
are related as well, including global warming, reduction in bio-
diversity and species loss.
- (a) Global Warming: Deforestation in developing countries
accounts for between 7 and 31 percent of global carbon dioxide
emissions which cause climate change.
- (b) Bio-diversity: Northern Brazil is losing natural
forests with the substitution of fast-growing eucalyptus and pine
trees, cattle ranching and commercial logging.
- (c) Species Loss: Much of Brazil's native flora, fauna
and animal species are being lost with the harvesting of tropical
forests. The ban does not affect the amount of trees being felled
because the ban is only for wood in raw form. A study done on the
value of the fruits, latex, medicinal herbs, essences and oil
discovered that in the long run investment in these products were
more profitable than either logging or cattle ranching.
21. Name, Type, and Diversity of Species
Name: Tropical Hardwoods
Diversity:6,607 higher plants per 10,000 km/sq (Brazil)
Two million to 30 million species exist in the Amazon and
27,000 species may be consigned to extinction every year. This
destruction is the result of forests being felled at a rate of
1,800 hectares (about 4,500 acres) every hour.
22. Resource Impact and Effect: HIGH and Structural
23. Urgency of Problem: MEDium and 100s years
Brazil's rain forests are quickly disappearing under a variety
of stresses and replacing the eco-system may well take a millennia.
24. Substitutes: RECYCling
25. Culture: YES
There are hundreds of ethnographies of Indian tribes in the
Amazon. Darcy Ribeiro reported that between 1900 and 1957 some
eighty Indian tribes had been destroyed. During this same period
the number of indigenous peoples dropped from one million to two
hundred thousand. The Amazon basin held most of the remaining
Indians (some 140 tribes) and Ribeiro said these too would be
extinct unless the Indian Protection Service managed to insulate
the tribes from encroachment.
26. Trans-Boundary Issues: NO
Although the Amazon area covers several countries, it is not
an issue in the cases.
27. Rights: YES
Certain products such as Brazil nuts are now being marketed
supposedly as a way to save the rainforest and to protect
indigenous populations. However, most of these products are
commercialized in the open market, often by unscrupulous dealers.
Consequently, even when indigenous peoples are directly involved in
the transactions, they become victims of economic forces. In fact,
the movement to defend the harvest is deflecting the real problem:
land-tenure. Perhaps support for indigenous peoples should come
not from purchasing forest products, but from respecting their
28. Relevant Literature
Braga, Carlos Alberto Primo. "Tropical Forests and Trade Policy:
The Cases of Indonesia and Brazil" (World Bank 1992).
"Brazil's Logging 'Free-for-all' Compounds Threat to Amazon Rain
Forest," The Washington Post (February 25, 1992), A2.
"Can Scientists Reconcile the Inevitability of Economic
Development with the Preservation of Rain Forest?".
Scientific American (July 1993).
Cleary, David. Anatomy of the Amazon Gold Rush. University of
Iowa Press, 1990.
Corry, Stephen. "The Rainforest Harvest: Who Reaps the Benefit?"
The Ecologist 23/4 (July/August 1993).
Gilbert, D. and Colchester, M. "Indigenous Peoples and the
International Biodiversity Programme: Some Implications".
Survival International (London, 1989).
Hecht, Susanna and Cockburn, Alexander. The Fate of the
Forest, Developers, Destroyers and Defenders of the
Amazon. New York, Harper Perennial, 1990.
Holloway, Marquerite. "Can Scientists Reconcile the
Inevitability of Economic Development with the
Preservation of Rain Forests?," Scientific American (July
Low, Patrick, ed. International Trade and the Environment.
World Bank, 1992.
Monastersky, Richard. "The Deforestation Debate." Science News
144 (July 10, 1993).
Moran, Emilio F. "Deforestation and Land Use in the Brazilian
Amazon." Human Ecology 21 (March, 1993).
Narendra p. Sharma, ed. Managing the World's Forests: Looking
for a Balance between Conservation and Development.
World Bank, 1992
Shoumatoff, Alex. The World is Burning. Boston: Little Brown,
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